Question 2 The following information relates to A Ltd and B Ltd. Two companies which operate in the same industry and listed on the stock markets. All figures are in Ghana Cedis Summarized Profit and Loss Account B Ltd A. Ltd. 80,000 Operating profit 80,000 Interest paid 10,000 40,000 40,000 25,000 Profit after interest 70,000 Dividend paid 20,000 Retained Profit 50,000 15,000 Summarized Balance Sheet A Ltd. B Ltd 600,000 Total Assets less Current liabilities 600,000 Financed by: 100,000 100,000 Ghc 1.00 Ordinary shares 100,000 Reserves 400,000 10% Unsecured Loan stock 100,000 400,000 600,000 600,000 The market price of A Ltd. Shares is Ghc 3.50 and that of B Ltd is Ghc 4.90. The 10% unsecured loan stock for both companies is currently quoted at par. Required: For each company calculate the following variables and using them company the performance of the two companies 1. EPS 2. P/E Ratio 3. TIE 4. Dividend yield 5. Dividend cover 6. Net Asset per share Question 2 The following information relates to A Ltd and B Ltd. Two companies which operate in the same industry and listed on the stock markets. All figures are in Ghana Cedis Summarized Profit and Loss Account B Ltd A. Ltd. 80,000 Operating profit 80,000 Interest paid 10,000 40,000 40,000 25,000 Profit after interest 70,000 Dividend paid 20,000 Retained Profit 50,000 15,000 Summarized Balance Sheet A Ltd. B Ltd 600,000 Total Assets less Current liabilities 600,000 Financed by: 100,000 100,000 Ghc 1.00 Ordinary shares 100,000 Reserves 400,000 10% Unsecured Loan stock 100,000 400,000 600,000 600,000 The market price of A Ltd. Shares is Ghc 3.50 and that of B Ltd is Ghc 4.90. The 10% unsecured loan stock for both companies is currently quoted at par. Required: For each company calculate the following variables and using them company the performance of the two companies 1. EPS 2. P/E Ratio 3. TIE 4. Dividend yield 5. Dividend cover 6. Net Asset per share