Fig 1.16
At current prices, if the owner of 150,000 Studt Systems shares collected the dividend then sold the shares, how many Tombe shares could they buy with the proceeds (to the nearest 10,000)?
290,000
280,000
270,000
260,000
250,000
Step 1 – Calculate the Company Share value including the dividend 150,000 x (3.00 + 0.08) = £462,000
Step 2 – Calculate the number of Tombe shares 462,000/1.85 = 249,730
So the correct answer is 250,000
A rights issue brings an additional 10% of Studt Systems shares to the market. If the current price per share drops by 8%, what is Studt Systems’ new company value (to the nearest £million)?
£166 million
£167 million
£16.6 million
£1,670,000
£169 million
Step 1 – Calculate the new number of company shares 55 x 110% = 60.5 million shares
Step 2 – Calculate the new price 300 x 92% = £2.76
Step 3 – Calculate the Company Value £2.76 x 60.5 million = £166.98 million = £167 million (to the nearest million)
So the correct answer is £167 million
Fig 1.15
Which of the following represents the smallest amount?
Product B’s change in EU sales between Jan-June and July-Dec
7% of Product D’s US sales (Jan-June)
Product E’s change in US sales between Jan-June and July-Dec
Average US Product A sales per month (July-Dec)
Average US Product C sales per month (Jan-June)
Calculate each figure as follows; 77.8 – 72.2 = £5.6 million 76.5 x 0.07 = £5.355 million 78.2 – 72.7 = £5.5 million 50.5 / 6 = £8.42 million 60.5 / 6 = 10.08 million
Tip: remember to quickly re-scan the question because some people will put down the LARGEST value (E) not the SMALLEST (B).
Thus the correct answer is 7% of Product D’s US sales (Jan-June)
How much US and EU annual sales tax is due for Products B, C and D combined (to thenearest £million)?
£244 million
£211 million
£149 million
£243 million
£120 million
Step 1 - Calculate the US sales tax for Products B, C, D combined.
Step 2 - Calculate the European sales tax
Step 3 – calculate the total sales tax 31.2 + 117.414 = 148.614
Tip: notice as long as you check the US sales are over £130 million, you don’t actually have to calculate the total because there is no tax on sales over £130 million.
Thus the correct answer is £149 million
If the annual EU sales for Products B and C both comprise online: offline sales in a ratio of 2:3 then what are the online EU sales for Products B and C combined?
£198,120,000
£19,812,000
£13,208,000
£132,080,000
None of These
Step 1 – calculate the EU sales for Products B and C 88.0 + 92.2 + 72.2 + 77.8 = 330.2 (£million)
Step 2 – use the ratio to find online sales. online: offline = 2:3 330.2 = 2x + 3x = 5x x = 330.2/5 = 66.04 online sales = 2x = 132.08
Tip: in practice it’s quicker to just multiply 330.2 by (2/5) to obtain the ratio.
Thus the correct answer is £132,080,000
