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Consider the following scenario and answer all the questions thereafter. Scenario Startup (Pty) Ltd is...

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Accounting

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Consider the following scenario and answer all the questions thereafter. Scenario Startup (Pty) Ltd is an innovative technology company. They have experienced reasonable growth over the last few years and have consulted you as they face several key decisions. The Owners' Equity and Liabilities section of the balance sheet of the company on 31st December 2021 is as follows: Total Owners' Equity + Debt =35,000,000 The Ordinary Shares consist of 1,000,000 ordinary shares with a par value of R10 each. The owners, who also own the company, are contemplating listing the business on the JSE Alternative Exchange in order to raise funds to fund further expansion. They are unsure as to what list price they should be asking for. You know one of the owners personally and he knows you recently completed your Finance and Investments Qualification and has asked for your help. The company has produced the following forecasts for the next 5 years (R000) : The Free Cash flow is expected to grow at a rate of 3% of the fifth year's forecast. Using the information available, you have computed the Weighted Average Cost of Capital (WACC) of Startup (Pty) Ltd to be 12.2%

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