BUS3044F+Tutorial+2 - BUS3044F 2011 Tutorial Due: Week...

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BUS3044F 2011 Tutorial Due: Week beginning 28 February _____________________________________________________________ _ Question 1 Platocon has just declared a dividend of 437 cps for the 2010/11 financial year. You also have the following information: Dividends for 2007/8, 2008/9 and 2009/10 were, respectively, 380 cps, 398 cps and 417 cps Management has a policy of maintaining a 20% payout ratio Platocon’s shares are currently trading at R208.50 Platocon has 200,000 shares in issue The appropriate discount rate on equity is 12% a) Determine Platocon’s market cap (2 marks) b) Calulate the total present value the market is placing on Platocon’s growth opportunities. (7 marks) c) In light of your answer in (b), explain (in maximum 3 sentences) whether the market consider Platocon to be a growth or mature company. (2 marks) Question 2 Klein and Co’s financial statements show the following: Non-cash expenses: R 525,000
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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.

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BUS3044F+Tutorial+2 - BUS3044F 2011 Tutorial Due: Week...

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