Q1.financial statements for the last financial year for Shabanie plc Shabanie plcs shares have a par value
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Question:
Q1.financial statements for the last financial year for Shabanie plc
Shabanie plc’s shares have a par value of £0.25. The loan notes have a market value equal to their nominal value.
Shabanie plc’s policy is to depreciate capital expenditure in equal amounts over the estimated useful life of the asset. This policy matches the tax regulations that also state that tax must be paid at the appropriate rate on accounting profits on the last day of the year in which they are earned.
Required
- Calculate Shabanie’s weighted average cost of capital, capital gearing ratio and interest cover.
- Calculate the net present value for each of Shabanie plc’s three projects and select the preferred project(s) discussing the reasons for your selection.
Related Book For
Corporate Finance and Investment decisions and strategies
ISBN: 978-1292064062
8th edition
Authors: Richard Pike, Bill Neale, Philip Linsley
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