Financial Management Techniques
ASSIGNMENT 01SEMESTER 2 2022
UNIQUE NUMBER: 761323
PREVIEW
Question 1
All Glow (Pty) Ltd are financed as follows:
20 million ordinary shares of R2 each R40 000 000
5 000 debentures of R1 000 each R 5 000 000
Retained income R15 000 000
Long-term loans R20 500 000
Calculate the debt: equity ratio (based on book values). [Round your final answer to two
decimal places.]
a. 68.32: 31.68
b. 74.53: 25.47
c. 31.68: 68.32
d. 25.47: 74.53
Financed by equity = (R40m + R15m) = R55 m
Financed by debt = (R5m + R20.5m) = R25.5m)
Total R80.5m
Capital structure Equity = (55/80.5 x 100) = 68.32%
Debt = (25.5/80.5x 100) = 31.68%
D:E ratio = 31.68: 68.32