Question: please help with this question Question1 30 Marks Lola Ltd is a listed industrial company. Extracts form its annual reports are as follows: 178 Statement

 please help with this question Question1 30 Marks Lola Ltd is

please help with this question

Question1 30 Marks Lola Ltd is a listed industrial company. Extracts form its annual reports are as follows: 178 Statement of Financial Position as at 31 March 2000 Rm Share Capital 198 Retained income Shareholders' interest Floating rate debentures (repayable 2014) 136 Borrowings 102 614 376 Five-year projections, year ended 31 200 March 1 Profit after tax (Rm) 120 Dividend paid Retained profit 80 2002 144 48 2003 173 2004 207 69 138 2004 249 83 166 40 58 96 115 Profit after tax is determined after deducting the following cost: Depreciation 62 74 89 107 127 79 Interest 19 19 1919 19 The retained profit used to fund expansion while the depreciation charge used to cover asset replacement. The cost of equity estimated to be 12% and the weighted average cost of capital is 11%. The average price earnings ratio for industrial companies listed on the JSE is 15. Financial analysts have estimated Lola to have a beta of 1.5. From the year 2005, cash flow and dividends expected to grow at the rate of 6% per annum in perpetuity. The company tax rate is 28% Required: Calculate the value of the equity as at 30 June 2000, using dividend growth model, Price earnings ratio and free cash flow method

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