Post Graduate Diploma in Business Administration Module - Break-Even EBIT & EPS - Accounting Assignment Help

Assignment Task - 
 

The assignment requires knowledge a3nd the application of capital structure, investment  appraisal, financial statement & ratios, and business valuation. 

Assignment Question 

1. Kyana Solutions is looking at two different capital structures, one an all-equity firm, and the  other a levered firm with $2 million of debt financing at 8% interest. The all-equity firm will have  a value of $4 million and 400,000 shares outstanding. The levered firm will have 200,000 shares  outstanding.  

Question:  

i) You are required to find the break-even EBIT for Kyana Solutions using EPS if there are  no corporate taxes.  

ii) You are required to find the break-even EBIT for Kyana Solutions using EPS if the  corporate tax rate is 30%.  

iii) You are required to briefly explain on these two break-even EBITS for Kyana Solutions.   

2. Kyana Solutions has just set the company dividend policy at $0.50 per year. The company plans  on being in business forever. With the arrival Covid 19 there is a growing awareness on managing  finance for future use. Among those are on the stock trading in the stock markets. The Maintain  Director of Kyana Solutions knows that there are two types of markets namely primary market and  the secondary market and further seeks your expert advice.  

Question:  

i) You are required to calculate the price of this stock if an investor wants:  (a) 5% return, b) 10% return and (c) 20% return. 

ii) You are required to explain the two types of markets with suitable examples with special  reference to bear market and bull market.  

iii) You are required to comment on the function of a specialist in the secondary market.  iv) You are asked to differentiate common stock from preferred stock.  

3. Kyana Solutions wants to improve on its Capital and therefore the Managing Director of Kyana  Solutions is looking forward to your expertise on the follow specific points.  

Question:  

i) You are asked to describe a company’s main sources of cash for a company.  ii) You are required to briefly describe a company’s main uses of cash.  iii) According to you what are the sources available for Kyana Solutions to raise its capital?  iv) Do these different sources of capital available for Kyana Solutions, are they going to charge  the same rate of interest? Substantiate your answers with your reasons.  

4. The health of a company can be understood by examining its key financial ratios and the  financial activities it undertakes. The financial ratios reveal performance of a company and the  relationships between different accounts from financial statements. And the Activities are oriented  towards strengthening of the overall performance of the company. And therefore Kyana Solutions  is in pursuit of many major and minor business activities in a desire to provide a commercial  product and/or service, and with the goal to yield a satisfactory return in business.  

Question:  

i) You are required to briefly describe the financial ratios with a suitable example.  ii) You are required to identify and briefly explain any four major business activities that  would help Kyana Solutions.

As the assignment requires several tasks to be completed, the required report format  of 3,500 to 4,000 words (maximum) should be organised as follows: 

1. Executive Summary (200-300 words, not to be included in the word count) 2. Table of contents (not to be included in the word count) 

3. Introduction 

4. Main body 

The main body should address the requirements as stated in parts (a), (b), (c)  and (d) of the question. 

5. Conclusion 

6. References 

You are required to reference / research books and journals, apart from  online sites, using the Harvard Referencing Style

Criteria for the REPORT: 

1. Executive Summary [5%] 

2. Table of contents [3%] 

3. Introduction [7%] 

4. Main body [70%] is broken down into parts (a), (b), (c), (d) and overall  presentation: 

(a) [maximum: 16%]: 

• Product division producing negative in come or return item 

• Implications of low negative or loss-making item for financial  

returns and profitability. 

(b) [maximum: 12%]: 

• Critical evaluation for shutting down this production division 

(c) [maximum: 15%] 

• Identification and analysis of factors that improves operating cash flow • Critical analysis of reducing gearing and investment in new  business opportunities or plant expansion. 

(d) [maximum:22%] 

• Advice on the reliance of financial ratios analysis and budgetary  controls for monitoring and controls, its limitations. 

• Critical analysis of the company’s management accounting  

function and budgetary controls for its long run 

Overall presentation [5%]: 

• Clearly laid out and presented? 

• Accurate in spelling and grammar? 

5. Conclusion [10%] 

6. References [5%

 
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