Example of asset based valuation, Finance Basics

Assignment Help:

Example of Asset Based Valuation

Extracted information from the books of Kent Limited.

 

Current liabilities

Bank overdraft

   Sh.

300,000

  50,000

350,000

 

Land

Stock in trade

Sh.

250,000

100,000

350,000

Stock has a realizable value of Sh.80, 000 and land Sh.300, 000.  This company is supposed to be containing a share capital of ordinary shares20, 000.

Calculate the value of its shares.

i)       Assets method

          Assets = L and B            300,000

                     Stock                  80,000

                                                380,000

                    Liabilities             [350,000]

                                                   30,000

          Value of shares   =        30,000/20,000

                                      =        Sh.1.50


Related Discussions:- Example of asset based valuation

Weaknesses of wacc as discounting rate, Weaknesses of WACC as Discounting R...

Weaknesses of WACC as Discounting Rate WACC/Overall cost of capital has the following problems like a discounting rate as:  It can simply be used as a discounting

Money market mutual funds (), why i cant found date for mmmfs like total as...

why i cant found date for mmmfs like total asset or number of share or return ???? i search alot and i found words instead of number

Costs of capital, a bond that has a 1000 per value and a contract or coupon...

a bond that has a 1000 per value and a contract or coupon interest rate of 12.8%. The bond is selling for a price of $1125 and will mature in 10 years. The firm''s tax rate is 34%

Effective reach and effective frequency-insurance , Before purchasing insur...

Before purchasing insurance we have to go through different factors. Among different important factors there are two most crucial aspects we should consider before buying insurance

Unbiased Expectations Theory, What is the one-year Treasury security rate o...

What is the one-year Treasury security rate of 1R1? For 1R3=11%, E(2r1)= 4% and E(3r1)=5%

Aafafa, ksklklsdfmklsnakakngjkalkgblakbgklabgklagkbaskgbljas a kalks las l...

ksklklsdfmklsnakakngjkalkgblakbgklabgklagkbaskgbljas a kalks las lgaskgbak a lv aslglaksglas la sla

Incentive problem and consumption of perquisites, Incentive Problem and Con...

Incentive Problem and Consumption of Perquisites Incentive Problem Managers may have fixed salary and they may have no incentive to work hard and maximize shareholders weal

The return on the preferred stock, BAC is considering an issue of preferred...

BAC is considering an issue of preferred stock.  The dividends are 8.12% of the $25 par value. a.    If the present price is $26.25 per share, what is the return on the preferre

Working capital cycle, Working Capital Cycle The Concept of Working C...

Working Capital Cycle The Concept of Working Capital/Cash Operating Cycle Working capital cycle refers to period such elapses between the payment for raw materials bought

Explain mechanics of security trading in stock exchange, Explain Mechanics ...

Explain Mechanics of security trading in Stock Exchange Introduction: An investor should have some knowledge of how the securities markets operate. Marketing of old or new se

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd