Business, 20.12.2019 06:31 tressasill
Locomotive corporation is planning to repurchase part of its common stock by issuing corporate debt. as a result, the firm’s debt–equity ratio is expected to rise from 0.35 to 0.5. the firm currently has $3.6 million worth of debt outstanding. the cost of this debt is 8 percent per year. locomotive expects to have an ebit of $1.35 million per year in perpetuity. locomotive pays no taxes. a. what is the market value of locomotive corporation before and after the repurchase announcement? b. what is the expected return on the firm’s equity before the announcement of the stock repurchase plan? c. what is the expected return on the equity of an otherwise identical all-equity firm? d. what is the expected return on the firm’s equity after the announcement of the stock repurchase plan?
Answers: 1
Business, 22.06.2019 03:00
Sonic corp. manufactures ski and snowboarding equipment. it has estimated that this year there will be substantial growth in its sales during the winter months. it approaches the bank for credit. what is the purpose of such credit known as? a. expansion b. inventory building c. debt management d. emergency maintenance
Answers: 1
Business, 22.06.2019 17:00
Aaron corporation, which has only one product, has provided the following data concerning its most recent month of operations: selling price $ 102 units in beginning inventory 0 units produced 4,900 units sold 4,260 units in ending inventory 640 variable costs per unit: direct materials $ 20 direct labor $ 41 variable manufacturing overhead $ 5 variable selling and administrative expense $ 4 fixed costs: fixed manufacturing overhead $ 64,200 fixed selling and administrative expense $ 2,900 the total contribution margin for the month under variable costing is:
Answers: 2
Business, 22.06.2019 18:00
During the holiday season, maria's department store works with a contracted employment agency to bring extra workers on board to handle overflow business, and extra duties such as wrapping presents. maria's is using during these rush times.
Answers: 3
Business, 22.06.2019 19:10
Fortress international, a large conglomerate, procures a few component parts from external suppliers and also manufactures some of the key raw materials in its own subsidiaries. aside from this, the company does not solely depend on outside distributors to reach its customers. in fact, it has its own retail stores to distribute its products. in this scenario, which of the following alternatives to vertical integration is fortress international applying? a. concentric integration b. taper integration c. horizontal integration d. conglomerate integration
Answers: 1
Locomotive corporation is planning to repurchase part of its common stock by issuing corporate debt....
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