Firm C currently has 320,000 shares outstanding with current market value of $33 per share and generates an annual EBIT of $1,500,000. Firm C also has $1 million of debt outstanding. The current cost of equity is 9 percent and the current cost of debt is 6 percent. The firm is considering issuing another $3 million of debt and using the proceeds of the debt issue to repurchase shares (a pure capital structure change). It is estimated that the cost of the new debt will be 7 percent and that the cost of equity will rise to 10 percent with the additional debt. The marginal tax rate is 34 percent. a. What is the current market value of the firm
Answers: 3
Business, 21.06.2019 20:00
Which financial component is a mandatory deduction from your gross pay? a. sales tax b. social security tax c. health insurance d. disaster relief fund (drf) e. voluntary deduction
Answers: 1
Business, 22.06.2019 05:40
According to the philosopher immanuel kant, the right of employees to know the nature of the job they are being hired to do and the obligation of a company not to deceive them in this respect is mainly reflective of the basic right of . privac yb. free consentc. freedom of speechd. freedom of consciencee. first refusal
Answers: 1
Business, 22.06.2019 17:30
Aproject currently generates sales of $14 million, variable costs equal 50% of sales, and fixed costs are $2.8 million. the firm’s tax rate is 40%. assume all sales and expenses are cash items. (a). what are the effects on cash flow, if sales increase from $14 million to $15.4 million? (input the amount as positive value. enter your answer in dollars not in (b) what are the effects on cash flow, if variable costs increase to 60% of sales? (input the amount as positive value. enter your answers in dollars not in millions). cash flow (increase or decrease) by $
Answers: 2
Business, 22.06.2019 20:20
Faldo corp sells on terms that allow customers 45 days to pay for merchandise. its sales last year were $325,000, and its year-end receivables were $60,000. if its dso is less than the 45-day credit period, then customers are paying on time. otherwise, they are paying late. by how much are customers paying early or late? base your answer on this equation: dso - credit period = days early or late, and use a 365-day year when calculating the dso. a positive answer indicates late payments, while a negative answer indicates early payments.a. 21.27b. 22.38c. 23.50d. 24.68e. 25.91b
Answers: 2
Firm C currently has 320,000 shares outstanding with current market value of $33 per share and gener...
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