BF Ltd plans to raise a net amount of $300 m to finance new equipment and working capital early in the next financial year. The company is considering to issue bonds with coupon rate of 14% per annum (paid annually) and face value of $1,000. Currently, the company has 20 million shares outstanding. The company's tax rate is 30%.

The balance sheet and income statement of BF prior to financing are as follows:

Balance sheet

	$m		$m
Current assets	900	Accounts payable	300
		Other current liabilities	350
		Total current liabilities	650
Net fixed assets	450	Long-term debt (10%)	300
		Common shares ($5)	100
		Retained earnings	300
Total assets	1,350	Total liabilities and equity	1,350

Income statement

	$m
Sales	2,500
Cost of sales	2,000
EBIT	500
Interest	30
EBT	470
Tax (30%)	141
Net income	329

The next years projected sales are $2,700 million and EBIT is projected to be [depends on the last digit of student ID*] % of sales.

* If the last digit of your student ID is an odd number (for example XXXXXX3), EBIT is 15% of sales.

If the last digit of your student ID is an even number (including 0) (for example XXXXXX0 or XXXXXX2), EBIT is 25% of sales.

Assuming that the existing debt will remain outstanding, calculate the company's earnings per share (EPS) after issuing the new bonds (6 marks).

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BF Ltd anticipates growth over the next few years with the following dividends forecast for the next 4 years.

Year	Expected Dividend
1	$1.50
2	$2.86
3	$3.75
4	$5.25
5	?

After the year 4 dividend is paid, future dividends are expected to grow at a constant growth [depends on the last digit of student ID*] rate indefinitely.

* If the last digit of your student ID is an odd number (for example XXXXXX3), the growth rate is 5%.

If the last digit of your student ID is an even number (including 0) (for example XXXXXX0 or XXXXXX2), the growth rate is 7%.

If the required return is 10 %, what is the current share price? (5 marks)