BAF-6-MFI - Statement of Financial Position And Income Statement - Finance Assignment Help

Assignment Task

Softcell Limited is a privately owned company whose team of skilled professionals, led by their Managing Director, produces high quality electronic components and software. The Managing Director proposes to make an initial public offering in the stock market, to raise additional equity capital of £9.7 million after meeting issue costs of 3%. He has asked you to perform a ‘net assets’ valuation of the business, as suggested by the broker whom he has been in touch with. However, conscious of the limitations of such a valuation, he has also asked for a ‘dividend valuation’, as well as an ‘earnings valuation’. The company’s most recent summarised financial statements are as below (£ millions):

The enquiries you have made in the course of performing the valuations have revealed the following additional information:

(i) The freehold land and building, which has never been revalued, has risen in value by 60%.

(ii) The estimated realizable value of plant and equipment is £8 million.

(iii) About £4 million of stock is obsolete and not expected to realise more than 10% of its value.

(iv) No provision for doubtful debts has been made, but the company has been experiencing collection difficulties in respect of 15% of the book debts.

(v) Profit before tax is expected to grow at approximately 10% per year for the next three years, then stabilise at a level of about 5% per year for the foreseeable future.

(vi) The company’s policy, following the listing, is to maintain the existing dividend payout ratio of 40%.

(vii) 91-day UK Treasury Bills are currently trading at a market price of £99.85 per £100 nominal; the yield on such bills is generally calculated on an ACT/365 basis.

(viii) The market risk premium is currently estimated at 6%

This (BAF-6-MFI) Finance Assignment has been solved by our Finance experts at My Uni Paper. Our Assignment Writing Experts are efficient to provide a fresh solution to this question. We are serving more than 10000+ Students in Australia, UK & US by helping them to score HD in their academics. Our Experts are well trained to follow all marking rubrics & referencing style.
Be it a used or new solution, the quality of the work submitted by our assignment experts remains unhampered. You may continue to expect the same or even better quality with the used and new assignment solution files respectively. There’s one thing to be noticed that you could choose one between the two and acquire an HD either way. You could choose a new assignment solution file to get yourself an exclusive, plagiarism (with free Turnitin file), expert quality assignment or order an old solution file that was considered worthy of the highest distinction.