You are a Financial Consultant with a share brokerage firm. You have been given the following information about a company: Share Capital : Equity (Rs.10) Rs. 4,00,000Current Liabilities Rs. 1,00,000 12% Preference Rs. 1,00,000Fixed Assets Rs. 9,50,000 General Reserve Rs. 1,84,000Current Assets Rs. 2,34,000 10% Debentures Rs. 4,00,000 Additional information: market price of the share is Rs. 34 and the net profit after tax was Rs. 1,50,000, and the tax had amounted to Rs. 50,000. From the above details, calculate Return on Investment, Return on Shareholders' Funds, EPS, Book value per share and P/E ratio. Also, make your observations about the company on the basis of these ratios.

You are a Financial Consultant with a share brokerage firm. You have been given the following information about a company: Share Capital : Equity (Rs.10) Rs. 4,00,000Current Liabilities Rs. 1,00,000 12% Preference Rs. 1,00,000Fixed Assets Rs. 9,50,000 General Reserve Rs. 1,84,000Current Assets Rs. 2,34,000 10% Debentures Rs. 4,00,000 Additional information: market price of the share is Rs. 34 and the net profit after tax was Rs. 1,50,000, and the tax had amounted to Rs. 50,000. From the above details, calculate Return on Investment, Return on Shareholders' Funds, EPS, Book value per share and P/E ratio. Also, make your observations about the company on the basis of these ratios.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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For the following stock investment, find (a) the total purchase price, (b) the total dividend amount, (c) the capital gain or loss, (d) the total return, and (e) the percentage return. Ignore broker and SEC fees. (a) What is the total purchase price? $ (Simplify your answer.) ... Number of shares Purchase price per share Dividend per share Sale price per share 140 $17.50 $1.97 $13.65
Identify which company’s shares you would recommend as the better investment. Provide explanations. Liquidity Panda Koala Working capital 94,100 144,750 Current ratio 2.53 2.55 Quick/acid-test ratio 1.08 1.06 Solvency Panda Koala Debt ratio 0.32 0.36 Debt-to-equity ratio 0.47 0.56 Time interest earned 23.41times 19.05times Efficiency Panda Koala Accounts (and notes) receivable turnover 20.18times 14.82times Days' sales in receivables (average collection period) 22days 27days Inventory turnover 7.70times 4.91times Days' sales in inventory 57days 82days Total asset turnover 1.83times 1.90times Profitability Panda Koala Gross profit margin 29.98 %…
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You are an investment adviser. One of your clients approaches you for your advice on investing in equity sharesof Alpha Company. You have collected the following data:Earnings per share last year $5.00Payout ratio 0.30Return on equity 0.30Cost of equity capital 0.25The company plans to increase the payout ratio to 40% from year 6.Required:i) Estimate the price of an equity share of this company using an appropriate dividend discount modeland advise your client whether they should buy a share of the company.ii) Your client is keen to know whether there are any positive growth opportunities from theirinvestment. Explain to your client the meaning of this concept using appropriate calculations.
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Problem-oriented Experience REAL WORLD CHALLENGE I. Review the different types of stocks and bonds. II. Write all the given and formulas that you use in each problem. III. Solve the problem below, show your complete 1. The RYX financial institution declared a SOLUTION and FINAL ANWER. dividend of 59 per share for its common stock. The market value of the stock is P176. Determine the stock yield ratio.

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