Question One:

The last balance sheet of the company showed the following position.

Sh.'000'

Ordinary shares of Sh.20 each 200,000

Share premium 65,000.

Trade Payables 60,000

Accrued Expenses 95,000

Total 420,000

Assets: Sh.

Total Non-Current 290,000

Debtors 75,000

Cash 15,000

Stock 40,000

Total 420,000

Additional Information:

1. Market prices indicates that Noncurrent assets can fetch sh. 340,000.
2. Stocks can be sold at sh. 69,000.
3. A building which is not part of the non-current assets can be sold at sh. 190,000.

a) What is the Present value of this company's share?

Question two:

1. Company Y provides you with the following details:
2. The face value of a share is sh. 50.
3. A dividend of 8% will be given.
4. The Cost of equity is 7%
5. Growth rate is 3%.

b) What is the present value of this share?