Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please use the information to calculate all required questions Office Systems (Pty) Ltd has the following capital structure: 6 million ordinary shares at R1.00 each

image text in transcribed

please use the information to calculate all required questions

Office Systems (Pty) Ltd has the following capital structure: 6 million ordinary shares at R1.00 each 6 000 000 Retained earnings 1 200 000 7 200 000 The board of directors is planning a major capital expansion programme and intends raising an additional R3 000 000 from a rights issue. The current market price is R1.80 per share and the company can achieve a return on capital employed of 25% at present. The company is considering the following possible rights issue prices: R1.60 R1.40 R1.20 R 1.00 . . Required: Use the information provided to calculate the following: 4.1. The current earnings of the company 4.2. The current earnings per share 4.3. The after-tax earnings after the rights issue 4.4. The number of new shares that will have to be issued at each rights issue price 4.5. The total number of shares that will be in issue at each rights issue price 4.6. The earnings per share (EPS) at each rights issue price 4.7. The extent of EPS dilution at each rights issue price Show all formulas and calculations. (3) (3) (4) (5) (5) (5) (5

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Capital As Power

Authors: Jonathan Nitzan, Shimshon Bichler

1st Edition

ISBN: 0415496802, 978-0415496803

More Books

Students also viewed these Finance questions

Question

2. What is the meaning and definition of Banking?

Answered: 1 week ago

Question

3.What are the Importance / Role of Bank in Business?

Answered: 1 week ago