Kedron Brook Vegetable Ltd has a new issue of preference shares it calls 10/10 preference shares....

 

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Kedron Brook Vegetable Ltd has a new issue of preference shares it calls 10/10 preference shares. A preference share will pay a $10 dividend per year, but the first dividend will not be paid for 10 years from today. If you require a return of 11.5% on this preference share, how much should you pay today? You have been asked to estimate the share price of the company you work at. The company is still very young and currently has negative earnings. The company's sales are $4.2 million and there are 160 000 shares outstanding. If the benchmark price-sales ratio is 7.5, what is your estimate of an appropriate share price? Kedron Brook Vegetable Ltd has a new issue of preference shares it calls 10/10 preference shares. A preference share will pay a $10 dividend per year, but the first dividend will not be paid for 10 years from today. If you require a return of 11.5% on this preference share, how much should you pay today? You have been asked to estimate the share price of the company you work at. The company is still very young and currently has negative earnings. The company's sales are $4.2 million and there are 160 000 shares outstanding. If the benchmark price-sales ratio is 7.5, what is your estimate of an appropriate share price?

Answer rating: 100% (QA)

Kedron Brook Vegetable Ltds 1010 preference shares offer a 10 annual dividendbut the first payment w... View the full answer