Mr. Rafique Azizan had been appointed as finance director of Extreme Broadband Berhad. He is required to (а) advise the board of management on the investment plan to be taken. The choices are either in Asia Media Group Berhad or Astro Malaysia Holdings Berhad. The annual historical share prices for both companies are as follows: Date ASIA MEDIA ASTRO (0159) (6399) 31/12/2020 31/12/2019 6.75 4.48 6.55 4.21 31/12/2018 6.68 4.39 31/12/2017 31/12/2016 31/12/2015 6.94 4.22 6.63 4.15 6.56 4.41 Based on the coefficient of variation for Asia Media Group Berhad and Astro Malaysia Holdings Berhad, determine the preferable company that Mr Rafique Azizan should suggest to Extreme Broadband Berhad.

Mr. Rafique Azizan had been appointed as finance director of Extreme Broadband Berhad. He is required to (а) advise the board of management on the investment plan to be taken. The choices are either in Asia Media Group Berhad or Astro Malaysia Holdings Berhad. The annual historical share prices for both companies are as follows: Date ASIA MEDIA ASTRO (0159) (6399) 31/12/2020 31/12/2019 6.75 4.48 6.55 4.21 31/12/2018 6.68 4.39 31/12/2017 31/12/2016 31/12/2015 6.94 4.22 6.63 4.15 6.56 4.41 Based on the coefficient of variation for Asia Media Group Berhad and Astro Malaysia Holdings Berhad, determine the preferable company that Mr Rafique Azizan should suggest to Extreme Broadband Berhad.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing

Section: Chapter Questions

Problem 19E

See similar textbooks

Similar questions

According to a company press release, on January 5, 2012, Hansen Natural Corporation changed its name to Monster Beverage Corporation. According to Yahoo Finance, on that day the value of the company stock (symbol: MNST) was $15.64 per share. On January 5, 2018, the stock closed at $63.49 per share. This represents an increase of nearly 306%. A. Discuss the factors that might influence the increase in share price. B. Consider yourself as a potential shareholder. What factors would you consider when deciding whether or not to purchase shares in Monster Beverage Corporation today?
Teleflex plc is a large multinational company in the power industry. The company needs to raise finance for expansion and is planning to raise this finance by listing and selling shares on the Stock Exchange. The finance director has asked for your assistance in preparing certain figures and reports for consideration by the management board.The extracts from Teleflex plc’s financial statements are shown below:Profit attributable to the ordinary shareholders for the year ended 31 March 2020 = £425,000 Number of ordinary shares in issue at 1 April 2019 = 4,000,000Teleflex plc issued one new share for every four existing shares held by way of a rights issue on 1 October 2019; the value of the rights was 50p per share on 1 October 2019. The share price before the issue was £1.00 per share.Required:With reference to IAS 33, Earnings per Share (EPS):a) Calculate the basic earnings per share to be reported in the financial statements of Teleflex Plc for the year ended 31 March 2020.EPS is…
Bharti Airtel plans to expand its network and prepare for the launch of 5G services. The board hadapproved raising up to ₹21,000 crore by issuing additional ordinary shares to its existing shareholders on a pro-rata basis of one new share for each fourteenequity shares of Bharti Airtel. The financial advisers to the corporation have recommended the use of an underwriting facility. Using this information, answer these questions. (i) What type of issue is Bharti Airtel making to its shareholders? What are the features of this type of issue? (ii)What is an underwriting facility, and why might Bharti Airtel use such a facility?
Khazanah Nasional Bhd-backed Farm Fresh Bhd (formerly known as Holstein Milk Company Sdn Bhd), an integrated dairy farming player, has filed a draft prospectus for an initial public offering (IPO) on the Main Market of Bursa Malaysia.According to the group’s draft IPO prospectus posted on the SecuritiesCommission Malaysia (SC) website, the proposed IPO will involve the sale of 743.18 million ordinary shares, comprising 222.95 million new shares and 520.23 million existing shares. Of the total 743.18 million shares, up to 687.44 million shares will be involved in the institutional offering to Malaysian and foreigner institutional and selected investors, including bumiputera investors approved by the Ministry of International Trade and Industry (MITI). The remaining 55.74 million shares will be made available for retail investors. The draft prospectus exposure confirms a report by The Edge Malaysia that the company submitted documents for a listing on Bursa.The Edge, quoting sources,…
The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2021. In addition, J&K Paint Shop Company’s charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000 shares class A -voting rights and 500,000 shares class B -nonvoting rights) and 400,000, $X par value (see info below), 5% cumulative preferred stock. They have asked each student from your accounting course to prepare the company’s journal entries and statement of owner’s equity based on the following information. Issued 60%shares of class A common stock. Stock has par value of $48.00 per share and was issued at $105.00 per share. (Please refer to table below and use only the info in line with your first name initial in the blank/underlined space). Issued 60%shares of no-par class B stock. Issue Price $98.00 Issued 20%shares of preferred stock at…
The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2021. In addition, J&K Paint Shop Company’s charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000 shares class A -voting rights and 500,000 shares class B -nonvoting rights) and 400,000, $X par value (see info below), 5% cumulative preferred stock. They have asked each student from your accounting course to prepare the company’s journal entries and statement of owner’s equity based on the following information. Issued 60%shares of class A common stock. Stock has par value of $48.00 per share and was issued at $105.00 per share. (Please refer to table below and use only the info in line with your first name initial in the blank/underlined space). Issued 60%shares of no-par class B stock. Issue Price $98.00 Issued 20%shares of preferred stock at…
The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2021. In addition, J&K Paint Shop Company’s charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000 shares class A -voting rights and 500,000 shares class B -nonvoting rights) and 400,000, $X par value (see info below), 5% cumulative preferred stock. They have asked each student from your accounting course to prepare the company’s journal entries and statement of owner’s equity based on the following information. a. Issued 40% shares of class A common stock. Stock has par value of $45 per share and was issued at $62 per share. b. Issued 40% shares of no-par class B stock. (Issue price is at $60.00) C. Issued 30% shares of preferred stock at par value (Par value - $125). d. Exchanged 40% shares of class A common stock for Office Furniture and…
The owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2021. In addition, J&K Paint Shop Company’s charter will authorize 1,200,000 shares of common stock (to be divided into two classes (700,000 shares class A -voting rights and 500,000 shares class B -nonvoting rights) and 400,000, $X par value (see info below), 5% cumulative preferred stock. They have asked each student from your accounting course to prepare the company’s journal entries and statement of owner’s equity based on the following information . Issued 40% of authorized shares of class A common stock. Stock has par value of $45 per share and was issued at $62 per share. Issued at $60, 40% of authorized shares of no-par class B stock. Issued 30% of authorized shares of preferred stock at par value $125. Exchanged 40% of authorized shares of class A common stock for Office…
The directors of Nico Limited have appointed you as a merger and acquisition specialist. They are considering theacquisition of Maya Limited. You are to advise them whether or not to proceed with the project.The following information is available: Nico Limited Maya LimitedMarket price per share R400.00 R280.00Earnings per share R240.00 R120.00No. of shares issued 2 000 000 800 000 - Cash payment to Maya Limited = R78 million.- Synergy benefits of R30 million will accrue through the acquisition.- Maya Limited have just had their assets re-valued and the valuation has appreciated quite significantly. Calculate the post-acquisition increase/decrease price of the share Assume the acquisition is based on market values with a cash payment Calculate the post-acquisition earnings per share Assume the acquisition is based on earnings per share
Weaver Plus is a company listed on the New York Stock Exchange market. Extracts from its current statement of financial position are as follows: $’m $’m Equity Ordinary shares (K1 nominal) 15 Reserves 153 168 Non-current liabilities 8% Irredeemable loan notes 10 6% Loan notes 12 22 190 Weaver Plus is planning on expansion of its existing business line and locations costing $10 million in the near future and is assessing its current financial position as part of preparing a business case in support of seeking new finance. The business expansion is expected to increase the profit before interest and tax of Weaver Plus by 20% in the first year. The planned business expansion by Weaver Plus has already been announced to the stock market. Information on the expected increase in profit before interest and tax has not yet been announced and the company has not decided on how the expansion is to be…
In business, the capital factor is the pivotal part and the capital structure must be followed as per the law. In accordance with Oman Commercial Companies Law, Star Win SAOG Registered its capital of OMR 6,000,000 which was divided into 6,000,000 shares of OMR 1 each. The company had an issue of paid-up capital OMR 3 million with no arrears. In the year 2021, the company came up with an IPO of 2 million shares. The company received an application for 2.5 million shares. The company finalized the allotment on 2,000,000 shares and rejected the excess applications. The business called up 80% of its face value amount for the allotted shares. The company received entire call amount except for 5000 shares, the shareholders who failed to pay the call money. Evaluate this situation of the above company, Calculate the amount of different categories of share capital and prepare the abstract of SFOP by showing only Share capital for the year 2021.
Amekom Plc is a public company that would like to acquire (100% of) a suitable private company. It has obtained the following draft financial statements for two companies, Bordiem Plc and Apim Plc. They operate in the same industry and their managements have indicated that they would be receptive to a takeover. Statements of Profit or Loss for the year ended 31st December, 2020 Bordiem Plc Apim PlcGH¢’000 GH¢’000 Revenue 12,000 20,500Cost of sales (10,500) (18,000)–––––––– ––––––––Gross profit 1,500 2,500Operating expenses (240) (500)Finance costs – loan (210) (300)– overdraft nil (10)– lease nil (290)–––––––– ––––––––Profit before tax 1,050 1,400Income tax expense (150) (400)–––––––– ––––––––Profit for the year 900 1,000–––––––– ––––––––Note: dividends paid during the year 250 700–––––––– ––––––– Statements of financial position as at 31st December, 2020AssetsNon-current assetsFreehold factory (note(i)) 4,400 nilOwned plant (note (ii)) 5,000 2,200Leased plant (note (ii)) nil…