Finance Assignment

motility One a. Re = D1/P0 + g P0 = $2.52 (stock expenditure in 2011) Finding g g = hard roe x plowback ROE = net in fetch after evaluate/ grantholder righteousness ROE= 1.696/12 = 0.141 g = 0.141 x 0.1145 = 0.0161 Finding D1 D1= D0 x (1+g) 0.09 x 1.0161 = 0.091449 = $ 0.09 ( 2 dp) Re = 0.09/2.52 + 0.0161 = 0.05181 = 5.18% Cost of loveliness purpose the DDM model is 5.18%% b. Re = Rf + B(Rm- Rf) = 6 + 0.95(6-4) = 7.9% Cost of equity using the CAPM model is 7.9% c. WACC = [ D/V x (1-Tc) x Rdebt] + (E/V x Requity) = [1324905/4657765 x (1- .28) x 0.0658] + (3332860/657765 x 0.079) =0.4695( 4 dp) =4.69% The calculated WACC should be use by AIA as it tells AIA how untold from each dollar goes towards compensable for their capital, whether it be equity or debt. Both of these are pro rata weighted, according to its respective use. interrogation Two Cum wealth : $1.12 x 3500 = $3921 Ex price : x = NC + S N + 1 = (9.5 x 1.12 +0.88)/(9.5+1) = 1.1097 = $1.10 ( 2 sf) Rights value : R= X-S = $1.10 0.88 = 0.217 = $0.

22 (2 dp) If we were to share them : 3500 x $1.10 = $3850 368.42(rights) x 0.22 = $81.05 $3850 x 81.05 = $3931 If we were to exercise rights 3500 +368.42 3868.42 @ $1.10 = $4255.26 Less subscription paying 368.42 x 0.88 = 324.21 = $3931 This shows that the wealth of a shareholder with 3500 shares is not horny by rights issue. Question Three come pct change in Sales = 2.389% just percentage change in EBIT = 3.54% Average percentage change in EPS= 6.71% a. DOL = 3.54/2.389 = 1.48 (2 dp) DFL = 6.71/3.54 = 1.89 (2 dp) DTL = 1.48 x 1.89 = 2.79 ( 2 dp) b. DFL @ 2011 EBIT Level 25601/(25601-3545) c. 2012 EBIT = 28673.12 DFL = percentage change in EPS/...If you want to get a full essay, order it on our website: Ordercustompaper.com

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