Acc501 Assignment:
Q NO: 1
SOLUTION:
Debt-equity ratio= 0.4
=1+0.4=1.4
Profit margin = 4%
Dividend payout ratio=50%
Retention ratio(b) = 1-0.5= 0.5
Total assest turnover =1
Find:ROE=?
And g =? ( sustainable growth rate)
ROE= PM×TAT × D-ER
=4% × 1 × 1.4
= 5.6%
=0.056
g=
=
𝐑𝐎𝐄 × 𝐛
𝟏−(𝐑𝐎𝐄 × 𝐛)
𝟎.𝟎𝟓𝟔 × 𝟎.𝟓
𝟏−(𝟎.𝟎𝟓𝟔 × 𝟎.𝟓)
=0.0288
g=2.88%
QNO:2
SOLUTION:
FV= RS 700,000
PV= RS 300,000
T= 6 years
r=? ( interest)
Formula:
FV= PV × (1+ r)t
700,000=300,000( 1+ r)6
𝟕𝟎𝟎,𝟎𝟎𝟎
𝟑𝟎𝟎,𝟎𝟎𝟎
=( 1+ r)6
(2.33)1/6= ( 1+ r)1/6
4.096= 1+ r
4.096-1=r
r=3.096