BUS3026W_2009+Tutorial+2

BUS3026W_2009+Tutorial+2 - School of Management Studies...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
School of Management Studies BUS3026W Finance II 2009 Tutorial 2 Due: Week beginning 2 March ______________________________________________________________ Please show all your calculations. 2 Marks will be subtracted for every question not properly attempted. Question 1: The following information applies to the capital structure of Motif Ltd.: Market Value Before-tax Required Return Preference Shares 100,000,000 5% Bonds 150,000,000 7% Ordinary Shares 1,100,000,000 10% In addition, the following estimates are available for this year: The bonds are trading at par. Preference shares are currently correctly priced by the market. The net income attributable to ordinary shareholders is R 140 million. Investment in WC is R 35 million. Investment in fixed capital is R 80 million. Depreciation is R 45 million. There are 45 million ordinary shares in issue. The current tax rate is 25%. Free cash flows are expected to grow at 5% going forward.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/01/2011 for the course FIN 3026W taught by Professor Drtoerien during the Summer '09 term at University of Cape Town.

Page1 / 3

BUS3026W_2009+Tutorial+2 - School of Management Studies...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online