Company A has a share capital of 10 million, 1 ordinary shares (ungeared). Company B has...
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Company A has a share capital of £10 million, £1 ordinary shares (ungeared). Company B has a capital of £10 million, made up of £5 million, £1 ordinary shares and £5 million 10% debentures (geared). Scenario 1: High operating profits of £3 million Scenario 2: Low operating profits of £600 000. REQUIRED 4.1 Calculate and evaluate the effect that scenario 1 and 2 have on EPS and gearing. (10 Marks) Company A has a share capital of £10 million, £1 ordinary shares (ungeared). Company B has a capital of £10 million, made up of £5 million, £1 ordinary shares and £5 million 10% debentures (geared). Scenario 1: High operating profits of £3 million Scenario 2: Low operating profits of £600 000. REQUIRED 4.1 Calculate and evaluate the effect that scenario 1 and 2 have on EPS and gearing. (10 Marks)
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Calculate the effect of scenarios on Earnings Per Share EPS and gearing Company A Ungeared Earnings ... View the full answer
Related Book For
Frank Woods Business Accounting Volume 2
ISBN: 9780273693109
10th Edition
Authors: Frank Wood, Alan Sangster
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