Use the following information for questions 1 to 3. Rights...

Use the following information for questions 1 to 3. Rights Plc has an ordinary shares capital of $1,200,000 in $1 par shares, an accumulated balance of $500,000 in the retained earning and a balance of $500,000 in the share premium account as at 1st January 2017. The company is also financed by a 5% non current liability loan of $500,000 and a issue of redeemable 6% preference shares of $300,000 at $1.00 par. On the 1st December 2017, the company undertook a 1 for 3 rights issue at a price $3 per share. The operating profit was $800,000 for the year-ended 31 December 2017, of which 20% is expected to be paid out as equity dividends. The company pays taxes at a rate of 20%. Question 1 - 1 mark Compute the gearing ratio (based on debt to equity) as at 1st January 2017. a) 22.73% b) 36.36% c) 20.00% d) 26.67% Question 2 - 1 mark Compute the cash proceeds as a result of the rights issue as at 1st December 2017. a) $ 400,000 b) $ 800,000 c) $ 1,200,000 d) $ 300,000 Question 3 - 1 mark Compute the earnings per share for the year ended 31 December 2017. a) $0.38 per share b) $0.48 per share c) $0.20 per share d) $0.50 per share

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What is the equilibrium quantity and price charged to each customer? (b) Suppose resale is possible, what is the equilibrium quantity and price?Use the following information for questions 1 to 3 . Rights Plc has an ordinary shares capital of $1,200,000 in $1 par shares, an accumulated balance of $500,000 in the retained earning and a balance of $500,000 in the share premium account as at 1^(st ) January 2017 . The company is also financed by a 5% non current liability loan of $500,000 and a issue of redeemable 6% preference shares of $300,000 at $1.00 par. On the 1st December 2017, the company undertook a 1 for 3 rights issue at a price $3 per share. The operating profit was $800,000 for the year-ended 31 December 2017 , of which 20% is expected to be paid out as equity dividends. The company pays taxes at a rate of 20%. Question 1 - 1 mark Compute the gearing ratio (based on debt to equity) as at 1st January 2017. a) 22.73% b) 36.36% c) 20.00% d) 26.67% Question 2 - 1 mark Compute the cash proceeds as a result of the rights issue as at 1^(st ) December a) $400,000 b) $800,000 c) $1,200,000 d) $300,000 Question 3 - 1 mark Compute the earnings per share for the year ended 31 December 2017. a) $0.38 per share b) $0.48 per share c) $0.20 per share d) $0.50 per share Use the following information for questions 1 to 3 Rights Plc has an ordinary shares capital of $1,200,000 in $1 par shares,an accumulated balance of $500,000 in the retained earning and a balance of $500,000 in the share premium account as at 1st January 2017. The company is also financed by a 5 % non current liability loan of $500,000 and a issue of redeemable 6 % preference shares of $300,000 at $1.00 par. On the 1st December 2017, the company undertook a 1 for 3 rights issue at a price $3 per share. The operating profit was $800,000 for the year-ended 31 December 2017,of which 20% is expected to be paid out as equity dividends The company pays taxes at a rate of 20%. Question1-1mark Compute the gearing ratio (based on debt to equity) as at 1st January 2017. a) 22.73 % b)36.36 % c) 20.00 % d) 26.67 % Question 2-1mark Compute the cash proceeds as a result of the rights issue as at 1st December 2017. a $400,000 b $ 800.000 c) $1,200,000 d) $ 300,000 Question 3-1mark Compute the earnings per share for the year ended 31 December 2017. a $0.38 per share b) $0.48 per share c $0.20 per share d$0.50 per share

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