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

The cfo estimates, Klose Outfitters Inc. believes that its optimal capital ...

Klose Outfitters Inc. believes that its optimal capital structure having of 60% common equity and 40% debt, and its tax rate is 40%. Klose have raise additional capital to fund its

What is debt-equity ratio, Louis Futon Co. is currently an all-equity firm....

Louis Futon Co. is currently an all-equity firm. The current market value of the company is $80 million. The corporate tax rate is 35%. What is the new value of the company if Loui

Primary markets - financial markets, Primary Markets - Financial Markets ...

Primary Markets - Financial Markets These are markets such deal along with securities that have been issued for the first moment. The money flows directly from transferor or t

Miller-orr model, Miller-Orr Model Unlike the Baumol's Model, Miller-O...

Miller-Orr Model Unlike the Baumol's Model, Miller-Orr Model is a stochastic or like probabilistic model that creates the more realistic assumption of doubt in cash flows.

Finance , Why do some investors prefer high-dividends paying stocks? Why ,i...

Why do some investors prefer high-dividends paying stocks? Why ,ight other investors prefer low-dividend paying stocks?

Explain performance budgeting and zero base budgeting, Write short notes on...

Write short notes on the following: a) Performance budgeting b) Zero base budgeting c) Factors affecting dividend decisions d) Accrual concept

Basic eoq model, Basic EOQ Model The basic inventory decision model is...

Basic EOQ Model The basic inventory decision model is Economic Order Quantity or called EOQ model. This model is specified via the following equation as: Whereas:Q is

Prepare a schedule of working capital and statement, The Balance Sheet of B...

The Balance Sheet of Bharat Machinery Ltd., as on December 31, 2009 and 2010 are as follows:  Items Dec. 31, 2009 Rs. Dec. 31, 2010 Rs.

Definition of stock exchange, Definition of Stock Exchange According to...

Definition of Stock Exchange According to Pyle: "Stock Exchange are market places where securities which have been listed thereon, may be bought and sold for either investme

Determine total expenditure, Determine the amount you would be willing to p...

Determine the amount you would be willing to pay for a $1,000 par value bond paying $80 interest each year (annual) and maturing in 12 years, assuming you wanted to earn a 9% rate

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