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The following information relates to Company Beta Limited:

Beta (Public Company) Limited

Summary Balance

As at 31 December 2022

Tangible Fixed Assets		700,000
Current Assets	800,000
Current Liabilities	300,000
Working Capital		500,000
Total Assets less Current Liabilities		1,200,000
10% Debenture Loan (Corporate Bond)		400,000
Net Assets		800,000
Capital And Reserves
200,000 Ordinary Shares of 1.00 each		200,000
Profit and Loss Reserve		300,000
Share Premium Reserve		150,000
Revaluation Reserve		150,000
Equity		800,000

1.If Beta (Public Company) Limited has earned profits before interest and Tax (PBIT) of 240,000 for the year ended 31 December 2022 and the proposal of the directors for a 25 cents per share dividend has been accepted by its shareholders, calculate the following ratios explaining briefly the usefulness of each one (Corporation tax for 2021 stands at 40%, and the shares current market price at the stock exchange is 5.40):

Return on Total Long Term Capital

Return on Borrowed Capital

Return on Equity

Earnings Per Share

Current Ratio

Gearing (leverage)

(P/E) Ratio

Dividend Yield Ratio

Dividend Cover Ratio.

2.Given that the current market price of the share is (as shown above 5.40 and the expected (P/E) ratio is 7, is the share over or underpriced and approximately by how much? Briefly explain your answer.

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