QUESTION THREE a) Asempaye Lid is a prosperous private company, whose owners are also the directors. The directors have decided to sell their business and have begun a search for organizations interested in the purchase. They have asked for your assessment of the price per ordinary share a purchaser might be expected to offer. Relevant information is as follows Statement of financial position as at 31 December 2010 Nor-cumentaires GHEM GHAM Land and buildings 800 Plant and machinery 450 Motor vehicles 55 Patent 2 1,307 Current assets Inventory 250 Receivables 125 Cash 8 383 Current liabilities Payables 180 Taxation SO 230 Nel current asset 153 Loan secured on property (400) 1,060 Ordinary shares (300,000) 300 Reserves 260 1.060 Profits after tax and interest but before dividend over the past 5 years were as followe Year GHCM 2004 80 2005 78 2006 87 2007 95 2008 100 The annual dividend has been GH 45 million for the last six years. The company's five years plan forecast an after tax profit of GHe 100 million for the next 2 months with an increase of 4% a year over reach of the next 4 years As part of their preparations to sell the company, the directors lave uad their current assets revalued by an independent expert with the following results GHE Land and buildings 1.075 Plant and machinery 480 Motor vehicles 45 The dividend yields and the P/E mtios of three quoted companies in the same industry as Asempaye Over the last years have been as follows: Assaba Ltd Passah Ltd Arthur Ltd D/ YPE D/Y P/E D/Y P/E S 2010 12.0 8.5 110 9.0 13.0 10.0 1999 12.0 8.0 10.6 8.5 126 9.5 1998 12.0 8.5 93 8.0 124 9.0 Averiges 12.0 8.33 10.3 12.7 9.5 Large companies in the industry upply an after-tax cost of capital of about 18% to ucquisition proposal when the investment is not backed by tangible assets, as opposed to a fare of 145. on the nct tangible assets. Your assessinent of the net cash flow which will accrue to a purchasing company, allowing for taxation and capital expenditure for a largel live year period is as follows: Year Cash flow GH 1 120 2 120 3 140 70 S 120 Required Use the information provided to suggest six (6) Valuations which prospective purchasers mught make. (Assone that the risk associated with lack of marketabllity of Ascropayed is 20) [22 marks] b) Scale five (5) reasons for valoing a business (5marks e) Suite three (3) factors to consider when making a decision on functional cuency (3 mus