问答题

问答题

问答题

问答题

问答题

问答题

单选题A company has in issue loan notes with a nominal value of $100 each. Interest on the loan notes is 6% per year,payable annually. The loan notes will be redeemed in eight years’ time at a 5% premium to nominal value. The before-tax cost of debt of the company is 7% per year. What is the ex interest market value of each loan note?

单选题The following scenario relates to questions 21 to 25. Ring Co has in issue ordinary shares with a nominal value of $0.25 per share. These shares are traded on an efficient capital market. It is now 20X6 and the company has just paid a dividend of $0.450 per share. Recent dividends of the company are as follows: Ring Co also has in issue loan notes which are redeemable in seven years time at their nominal value of $100 per loan note and which pay interest of 6% per year. The finance director of Ring Co wishes to determine the value of the company. Ring Co has a cost of equity of 10% per year and a before-tax cost of debt of 4% per year. The company pays corporation tax of 25% per year.

单选题Which of the following statements concerning working capital management are correct? 1 Working capital should increase as sales increase 2 An increase in the cash operating cycle will decrease profitability 3 Overtrading is also known as under-capitalisation

单选题Crag Co has sales of $200m per year and the gross profit margin is 40%

单选题The following scenario relates to questions 26 to 30. The following information relates to an investment project which is being evaluated by the directors of Fence Co, a listed company. The initial investment, payable at the start of the first year of operation, is $3.9 million. The directors believe that this investment project will increase shareholder wealth if it achieves a return on capital employed greater than 15%. As a matter of policy, the directors require all investment projects to be evaluated using both the payback and return on capital employed methods. Shareholders have recently criticised the directors for using these investment appraisal methods, claiming that Fence Co ought to be using the academically-preferred net present value method. The directors have a remuneration package which includes a financial reward for achieving an annual return on capital employed greater than 15%. The remuneration package does not include a share option scheme.

单选题A company has 7% loan notes in issue which are redeemable in seven years’ time at a 5% premium to their nominal value of $100 per loan note. The before-tax cost of debt of the company is 9% and the after-tax cost of debt of the company is 6%. What is the current market value of each loan note?