Anidaso Ltd operates in the manufacturing industry in Ghana. The company is in the process of selling some of its shares to the general public in order to raise enough funds to expand its operations. Below are the financial statements of the company:

• The patents in the statement of financial position represents a license to produce an improved variety of a product and is expected to generate a pre-tax profit of GH¢10,000 per year for the next five years.
• Abiola Limited is a competitor company listed on the Ghana Stock Exchange and data extracted from its recently published financial statements revealed the following details:
  Market capitalisation                                                          GH¢1,000,000
  Number of ordinary shares                                                         800,000
  Earnings per share                                                                      GH¢0.20
  Dividend payout ratio                                                                    80%
• The cost of capital of Anidaso Ltd is 10%.

Required:
Determine the value to be placed on each share of Anidaso Ltd using the following methods of valuation:
i) Net assets;                              (4 marks)

ii) Price-earnings ratio;              (4 marks)

iii) Dividend yield;                     (3 marks)

iv) Discounted cash flow.           (4 marks)

Santader Limited intends to take over Agos Limited. The financial statements of Agos Limited for the year ended 30 June 2016 are as follows:

Additional Information:
i) Turnover, profits before tax and dividend of Agos Limited over the past 5 years were as follows:

ii) The patent represents a license to produce and sell a special product. This product is expected to generate a pre-tax profit of GH¢12,000 per annum in perpetuity.
iii) The discount rate of Agos Limited is 10% per annum.
iv) Nhyira Limited, a major competitor of Agos Limited, is listed on the Stock Exchange and has a P/E ratio of 8 and a dividend yield of 10%.
v) Nhyira Limited expects a return of 11% of the net assets.

Required:

Note:
1. You may assume that it is about 10% more risky investing in unlisted entity than investing in listed entity.
2. Unless otherwise deemed inappropriate, the current year’s financial statements (appropriately adjusted) may form the basis of the valuation. 

Required:
iii) Estimate the value per share of Agos Limited as at 30 June, 2016 using the Price/earning ratio method:                (4 marks)

In 2015, the shareholders of Depot Ltd decided to sell their equity stake in the company. The company is not listed and the new shareholders plan to prepare the company for listing once the acquisition was completed. The summarized financial statements of Depot Ltd for the year ended 30th June, 2015 are stated below:

The following additional information is provided;
1) The discounted present value of future cash payments in respect of the long term loan is GH¢48,800,000.
2) The stated capital of Depot Ltd is made up of 25,000,000 ordinary shares of no par value.
3) Current Assets include inventory of GH¢6,600,000 representing goods received from a major supplier on “not for sale but display only” basis.
4) The fair value of the tangible non-current assets was GH¢116,000,000.
5) The profit for the current year includes VAT of 17.5% on turnover of GH¢8,500,000 being invoice amount sold to a customer.
6) The discount rate of Depot Ltd is 10% per annum.
7) Warehouse Ltd, a major competitor of Depot Ltd is listed with a P/E ratio of 9 and dividend yield of 5.2.
8) Profits after tax over the 4 years were as follows;

Required:
Compute the value to be placed on the ordinary shares using three methods of valuation and advise the Directors accordingly.                                                                                                                                                                                           (15 marks)