Lazenby plc has been set up to exploit an opportunity to import a new product from overseas. It has issued two million ordinary shares of par value 25p, sold at a 25 per cent premium. Its projected accounts show the following annual operating figures: Sales revenue £500,000 Operating costs (£300,000) (after depreciation of £50,000) Operating profit £200,000 Taxation @ 30% (£60,000) Profit after tax £140,000 Required Value each share in Lazenby: (a) assuming perpetual life. (b) over a ten-year horizon.

Lazenby plc has been set up to exploit an opportunity to import a new product from overseas. It has issued two million ordinary shares of par value 25p, sold at a 25 per cent premium. Its projected...

Lazenby plc has been set up to exploit an opportunity to import a new product from overseas. It has issued two million ordinary shares of par value 25p, sold at a 25 per cent premium. Its projected accounts show the following annual operating figures:

Sales revenue	£500,000
Operating costs	(£300,000)
(after depreciation of £50,000)
Operating profit	£200,000
Taxation @ 30%	(£60,000)
Profit after tax	£140,000

Required

Value each share in Lazenby:

(a) assuming perpetual life.

(b) over a ten-year horizon.

May 26, 2022

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Lazenby plc has been set up to exploit an opportunity to import a new product from overseas. It has issued two million ordinary shares of par value 25p, sold at a 25 per cent premium. Its projected...

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