FIN3701 ASSIGNMENT 2 2021

FIN3701 ASSIGNMENT 2
2021

, Question 1

1.1

0% 20% 40%
Debt 0 150 000 300 000
Equity 750 000 600 000 450 000
Number of shares 15 000 12 000 9 000



Total equity = 15 000 x R50 = R750 000




1.2

0% 20% 40%
Sales 600 000 600 000 600 000
Less: Fixed costs (100 000) (100 000) (100 000)
Less: VC (0.30 x (180 000) (180 000) (180 000)
600 000)
EBIT 320 000 320 000 320 000
Less: Interest - (24 000) (48 000)
320 000 296 000 272 000
Tax (28%) (89 600) (82 880) (76 160)
Net Profit 230 400 213 120 195 840
EPS 15.36 17.76 21.76




The capital structure to choose is 40% because it has a higher EPS




Call/Whatsapp 066 077 8000 for enquiries and assistance