The following is an extract from Sasol Limited's 2011 booklet outlining its results: ... This low...

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The following is an extract from Sasol Limited's 2011 booklet outlining its results: ... This low level of gearing (4.6%) is expected to be maintained in the short-term, but it is likely to return to within our targeted rage of 20% to 40% in the medium term as our large capital intensive growth programme and gas acquisition strategy gains momentum. At the annual general meeting of 26 November 2010, shareholders granted the Sasol directors authority to buy back up to 10% of Sasol's issued share capital (excluding the preferred ordinary and Sasol BEE ordinary shares) for a further 12 months'. Requirement: 2.1 What is meant by the term 'low level of gearing"? (2 marks) 2.2 Describe what is expected to happen to the company's capital structure in the near future and why. (10 marks) The following is an extract from Sasol Limited's 2011 booklet outlining its results: ... This low level of gearing (4.6%) is expected to be maintained in the short-term, but it is likely to return to within our targeted rage of 20% to 40% in the medium term as our large capital intensive growth programme and gas acquisition strategy gains momentum. At the annual general meeting of 26 November 2010, shareholders granted the Sasol directors authority to buy back up to 10% of Sasol's issued share capital (excluding the preferred ordinary and Sasol BEE ordinary shares) for a further 12 months'. Requirement: 2.1 What is meant by the term 'low level of gearing"? (2 marks) 2.2 Describe what is expected to happen to the company's capital structure in the near future and why. (10 marks)

Answer rating: 100% (QA)

21 The term low level of gearing refers to the extent to which a company finances its operations and ... View the full answer