EXERCISE 9 Given below is the Financial Position of Mega Juta Bhd.

Financial Position as at 31st December 2017 (RM000)

Assets Liabilities & Equities Current assets 116,000 Current liabilities 70,000 Fixed assets 286,000 Long term debt @ 10% 160,000 Common stock @ RM4 per share

172,000

402,000 402,000

Mega Juta Bhd needs to expand its business and requires additional fund of RM1, 000, 000. The company has two plans to raise funds: Plan 1 50% - common stock@RM50 per share 50% - 10% preferred stock @ RM100 par value

Plan 2 60% - 6% coupon bond 40% - 10% preferred stock @RM100 par value