18 Which of the following statements about accounting ratios and their interpretation are correct?1 A low-geared company is more able to survive a downturn in profit than a highly-geared company.2 If a company has a high price earnings ratio, this will of

题目

18 Which of the following statements about accounting ratios and their interpretation are correct?

1 A low-geared company is more able to survive a downturn in profit than a highly-geared company.

2 If a company has a high price earnings ratio, this will often indicate that the market expects its profits to rise.

3 All companies should try to achieve a current ratio (current assets/current liabilities) of 2:1.

A 2 and 3 only

B 1 and 3 only

C 1 and 2 only

D All three statements are correct

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11 Which of the following statements are correct?1 A company might make a rights issue if it wished to raise more equity capital.2 A rights issue might increase the share premium account whereas a bonus issue is likely to reduce it.3 A bonus issue will reduce the gearing (leverage) ratio of a company.4 A rights issue will always increase the number of shareholders in a company whereas a bonus issue will not.A 1 and 2B 1 and 3C 2 and 3D 2 and 4

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Which of the following measures a company’s ability to pay its current liabilities ().A.number of times interest charges earnedB.inventory turnoverC.earnings per shareD.current ratio

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Which of the following statements about an LCD screen is not true?()A. An LCD screen consumes more power than a CRT screen.B. An LCD screen display may present high-quality images but only to viewers sitting directly in fron of the screen.C. Currently, all laptops use LCD screens.D. An LCD screen is considerably more expensive than a CRT screen.

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第4题

KFP Co, a company listed on a major stock market, is looking at its cost of capital as it prepares to make a bid to buy a rival unlisted company, NGN. Both companies are in the same business sector. Financial information on KFP Co and NGN is as follows:NGN has a cost of equity of 12% per year and has maintained a dividend payout ratio of 45% for several years. The current earnings per share of the company is 80c per share and its earnings have grown at an average rate of 4·5% per year in recent years.The ex div share price of KFP Co is $4·20 per share and it has an equity beta of 1·2. The 7% bonds of the company are trading on an ex interest basis at $94·74 per $100 bond. The price/earnings ratio of KFP Co is eight times.The directors of KFP Co believe a cash offer for the shares of NGN would have the best chance of success. It has been suggested that a cash offer could be financed by debt.Required:(a) Calculate the weighted average cost of capital of KFP Co on a market value weighted basis. (10 marks)(b) Calculate the total value of the target company, NGN, using the following valuation methods:(i) Price/earnings ratio method, using the price/earnings ratio of KFP Co; and(ii) Dividend growth model. (6 marks)(c) Discuss the relationship between capital structure and weighted average cost of capital, and comment onthe suggestion that debt could be used to finance a cash offer for NGN. (9 marks)

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(a) The following figures have been calculated from the financial statements (including comparatives) of Barstead forthe year ended 30 September 2009:increase in profit after taxation 80%increase in (basic) earnings per share 5%increase in diluted earnings per share 2%Required:Explain why the three measures of earnings (profit) growth for the same company over the same period cangive apparently differing impressions. (4 marks)(b) The profit after tax for Barstead for the year ended 30 September 2009 was $15 million. At 1 October 2008 the company had in issue 36 million equity shares and a $10 million 8% convertible loan note. The loan note will mature in 2010 and will be redeemed at par or converted to equity shares on the basis of 25 shares for each $100 of loan note at the loan-note holders’ option. On 1 January 2009 Barstead made a fully subscribed rights issue of one new share for every four shares held at a price of $2·80 each. The market price of the equity shares of Barstead immediately before the issue was $3·80. The earnings per share (EPS) reported for the year ended 30 September 2008 was 35 cents.Barstead’s income tax rate is 25%.Required:Calculate the (basic) EPS figure for Barstead (including comparatives) and the diluted EPS (comparatives not required) that would be disclosed for the year ended 30 September 2009. (6 marks)

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第6题

C Co uses material B, which has a current market price of $0·80 per kg. In a linear program, where the objective is to maximise profit, the shadow price of material B is $2 per kg. The following statements have been made:(i) Contribution will be increased by $2 for each additional kg of material B purchased at the current market price(ii) The maximum price which should be paid for an additional kg of material B is $2(iii) Contribution will be increased by $1·20 for each additional kg of material B purchased at the current market price(iv) The maximum price which should be paid for an additional kg of material B is $2·80Which of the above statements is/are correct?A.(ii) onlyB.(ii) and (iii)C.(i) onlyD.(i) and (iv)

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第7题

Which three statements are correct about the differences in IS － IS and OSPF?()A. IS - IS is more CPU - intensive than is OSPFB. For greater fine tuning there are more IS - IS timersC. IS - IS LSP con tains TLV fields and OSPF LSU contains the LSAsD. New additions to the protocol are easily implemented in OSPF but not with IS - ISE. OSPF has more area types than does IS - IS

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18 Which of the following statements about accounting ratios and their interpretation are correct?1 A low-geared company is more able to survive a downturn in profit than a highly-geared company.2 If a company has a high price earnings ratio, this will of

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