Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Beach Limited is into the provision of online conference call facilities which has become popular due to Covid-19. The company has 10 million issued
Beach Limited is into the provision of online conference call facilities which has become popular due to Covid-19. The company has 10 million issued shares currently at Tk. 50 each, 3 million preference shares trading at Tk. 25 each and 5,000 bonds also trading at Tk. 600 each. Required: (1) Calculate the capital structure of the company. (ii) How much should the company earn annually to achieve a return of 25% per annum on capital employed for equity holders if dividend rate on preference shares per annum is 20% and coupon on the bonds is 18%? Interest paid on debt is tax deductible and corporate tax rate is 25%.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Solution 1 Calculate the capital structure of the company Equity Equity 10 000 000 shares x Tk50shar...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started