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FIN2601-25-EX06
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Jasper has just bought a share in a company that is expected to start paying dividends at the end of next year. The expected dividend for the next four years are as follows: R12, R10, R6 and R3. You expect to sell the share for R45 at the end of a four-year period. What is the share currently worth, assuming a required return of 12%?
ProductionDesign made two announcements concerning its ordinary share value. First, the company announced that the next annual dividend will be R1,75 per share. Secondly, all dividends after that will decrease by 1,5% annually. What is the maximum price you should pay for a share today if you require a 14% rate of return?
NTH Level Construction, a government building contractor, is going to pay an annual dividend of R2,86 a share on its common stock next year. This year, the company paid a dividend of R2,75 a share. The company adheres to a constant rate of growth dividend policy. What will one share of this common stock be worth five years from now if the applicable discount rate is 11,70%?
Kiddies County clothing company pays 6% interest on its outstanding debt, which amounts to R720 000. The company’s sales are R2 478 000, its tax rate is 40% and its net profit margin is 10,7%. What is the company time interest earned ratio?
Jarvis Surgical financial statements shows that the company had preference share dividends of R80 000 and a profit after taxes of R750 000. The company had generated sales of R10 000 000. What is company’s profit margin?
The Harddrive, the technology consulting company, earnings before interest and tax (EBIT) is R20 000 000. The company’s time interest earned (TIE) ratio is 8,0, its tax rate is 35%, and its total assets turnover ratio is 1,25 with a sales value of R800 000. What is the company’s return on assets (ROA)?
Evolve Health, a pharmaceutical company, the statement of comprehensive income shows R87 960 in earnings before tax (EBIT), interest expense of R62 500 and R10 000 in preference share dividend with a tax rate of 30%. The company had 1 000 number of shares issued and 1 000 number of shares outstanding. If the price/earnings ratio (P/E) is reported as 5,30 and ROE is 23,3%. What is the company’s market to book ratio?
Winston Washers has a current ratio of 3,0, a quick ratio of 2,4 and an inventory turnover ratio of 6. The company’s total assets are R1 000 000 and its debt ratio is 0,20. The company has no long-term debt. What is company’s sales figure if the total cost of goods sold is 75% of sales?
Which one of the following is most likely to increase the company’s current ratio?
The Harddrive, the technology consulting company, had a profit of R1 080 000 after tax and preference share dividends of R40 000. A total of 100 000 shares were outstanding and no interest expense. What were the company’s earnings per share?