Reuters PLC has the following capital structure: Ordinary shares - $0.70 Retained earnings 7000 4500 15% Preference shares at $0.50 9% $100 Redeemable Debentures 3000 3500 20% Bank loan 2000 Total funds employed 17000 The ordinary shares are quoted at $1.70 ex-div, the market price of the preference shares is $0.70 ex-div. Debenture stock is quoted at $67.95 ex-interest per $100 nominal and will be redeemable at par in exactly 5 years. Reuters PLC has a marginal rate of corporation tax of 25%. The current risk-free rate of return is 5%, the market rate of return is 10% and the company has an equity beta value of1.25.

Reuters PLC has the following capital structure: Ordinary shares - $0.70 Retained earnings 7000 4500 15% Preference shares at $0.50 9% $100 Redeemable Debentures 3000 3500 20% Bank loan 2000 Total funds employed 17000 The ordinary shares are quoted at $1.70 ex-div, the market price of the preference shares is $0.70 ex-div. Debenture stock is quoted at $67.95 ex-interest per $100 nominal and will be redeemable at par in exactly 5 years. Reuters PLC has a marginal rate of corporation tax of 25%. The current risk-free rate of return is 5%, the market rate of return is 10% and the company has an equity beta value of1.25.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 16E: Contributed Capital Adams Companys records provide the following information on December 31, 2019:...

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