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Question $16$

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The following information about BLUE$-$DOT $($Pty$)$ Ltd is available:

Extract from the statement of financial position:

Debentures at $13\%$ per annum

R$2500000$

Non$-$distributable reserves

Long$-$term loan

Retained income

Ordinary share capital

R$1600000$

R$4000000$

R$5400000$

R$40000000$

Additional information:

$-$ The debentures have a face value of R$2500000$ and are redeemable after eight years at face value.

$-$ The current dividend paid to shareholders was R$4,60$ and the expected growth rate is $7\%$ per annum.

$-$ The ordinary shares have a nominal value of R$20$ per share. The current market value per share is R$45.$

$-$ The current market return for similar debentures with a life of eight years is $12\%$ before$-$tax.

$-$ The agreement of the long$-$term loan provides that interest is charged at $9\%$ per annum. The current JIBAR rate for similar loans is $11\%($after$-$tax at the tax rate for BLUE$-$DOT $($Pty$)$ Ltd$).$

$-$ The current tax rate for companies is $28\%.$

Calculate the market value of BLUE$-$DOT $($Pty$)$ Ltds equity?

$($a$)$ R$17777780$

$($b$)$ R $9000000$

$($c$)$ R$90000000$

$($d$)$ R$40000000$

Select one:

a$.$

R$40000000$

b$.$

R$90000000$

c$.$

R $9000000$

d$.$

R$17777780$

Question $17$

Not yet answered

Marked out of $3\mathrm{.}00$

Flag question

Question text

The following information about BLUE$-$DOT $($Pty$)$ Ltd is available:

Extract from the statement of financial position:

Debentures at $13\%$ per annum

R$2500000$

Non$-$distributable reserves

Long$-$term loan

Retained income

Ordinary share capital

R$1600000$

R$4000000$

R$5400000$

R$40000000$

Additional information:

$-$ The debentures have a face value of R$2500000$ and are redeemable after eight years at face value.

$-$ The current dividend paid to shareholders was R$4,60$ and the expected growth rate is $7\%$ per annum.

$-$ The ordinary shares have a nominal value of R$20$ per share. The current market value per share is R$45.$

$-$ The current market return for similar debentures with a life of eight years is $12\%$ before$-$tax.

$-$ The agreement of the long$-$term loan provides that interest is charged at $9\%$ per annum. The current JIBAR rate for similar loans is $11\%($after$-$tax at the tax rate for BLUE$-$DOT $($Pty$)$ Ltd$).$

$-$ The current tax rate for companies is $28\%.$

Calculate the after$-$tax cost of BLUE$-$DOT $($Pty$)$ Ltds debentures? Set your calculator at four decimals and round your final answer to two decimal places.

$($a$)8,64\%$

$($b$)7,92\%$

$($c$)6,48\%$

$($d$)9,36\%$

Select one:

a$.$

$7,92\%$

b$.$

$8,64\%$

c$.$

$9,36\%$

d$.$

$6,48\%$