public listed company

Master Chef Limited became an ASX public listed company by issuing 11,110,000 ordinary shares at $1.45 each on 01 July 2016. At the end of one year (on 30 June 2017), the price of a share was $1.20. For the period of one year, the company paid dividends of 20 cents per share. The financial results of Master Chef for this year show the following information: Master Chef Limited Income Statement (Selected items) For the Year Ending on 30 June 2017 $’000 Revenue – Rental income 8,440 Operating Profit before items below Depreciation and amortisation Interest expense 6,107 3,534 1,284 The income tax rate for companies in Australia for this period was 30%. An investor purchased 100,000 ordinary shares on issue and held these shares for one year to 30 June 2017. Calculate the following financial measures for Master Chef: (a) Price-earnings ratio. (b) Dividend yield for the year. (c) Holding period return for the investor over the year.  (d) Market capitalisation on 30 June 2016.

finance business

Depending upon the circumstances, equity can also be referred to as: A. ordinary shares B. common stock C. risk capital D. shareholders’ funds. E. all of these. 2. Debt financing can be raised by firms in the ________markets. A. money and share B. bond and FX C. share and derivative D. money and bond E. share and FX. 3. An initial public offering: A. does not always raise additional equity funds for the business B. is the initial sale of shares to the public C. is also known as a ‘float’ D. is the process by which shares become listed on the ASX E. all of these. 4. In order to conduct a secondary market for shares, the ASX: A. sets the rules for the admission of companies to the market B. establishes trading and settlement arrangements C. discloses trading information, such as individual share prices D. promotes itself as a market for securities. E. all of these. 5. A difference between ordinary and preference shares is: A. preference dividends are payable only after ordinary dividends have been paid B. preference dividends are tax deductible C. preference dividends are a fixed amount D. ordinary shares are less risky E. preference shares have greater potential for capital gains.

Assets

1. An asset promises to pay $1,000 in each of the next two years. a) What is its present value assuming the one-year rate of discount is 1.5% and the two-year is 2.2%? b) What is its present value assuming both discount rates are 1.85%? 12. An asset promises to pay $60 in each of the next three years. Assume the rate of discount is 5% for each of the years. a) Calculate its price the “long” way; i.e., just as you have been doing for #11 and #12, by discounting each future cash flow and summing. b) Calculate its price using the annuity formula.