User Account

All Pages

A company needs $35,943,750 to finance a major project in

Assignment Help Finance Basics
Reference no: EM132768864

A company needs $35,943,750 to finance a major project in the company. The company expects that next year’s earnings from current operations and the additional earnings from the new project will be a total of $45,650,000. The company currently has 5,075,000 shares outstanding, with a price of $17.75 per share. The company’s management is assuming that any the additional shares issued to finance the project will not affect the market price of the company’s common stock.

Calculate the following:
If the $35,943,750 needed for the project is raised by selling new shares, what will the forecast for next year’s earnings per share (EPS) be?
If the $35,943,750 needed for the project is raised by selling new shares, what will the firm’s price earnings ratio (PE ratio) be?
If the $35,943,750 needed for the project is raised by issuing new debt,what will the forecast for next year’s earnings per share be? (Assume thatthere is no “tax shield effect” with issuing corporate debt.)
If the $35,943,750 needed for the project is raised by issuing new debt,what will the firm’s PE ratio be?

Reference no: EM132768864

Questions Cloud

This week’s written assignment asked you to perform the : This week’s Written Assignment asked you to perform the following financial calculations: (1) Current ratio, (2) Quick ratio, (3) Debt-to-total assets ratio, (4) Earnings-per-share (EPS), and (5) Market capitalization. please explain what each comput..
Make amortization schedule that would be suitable : Blossom Leasing Company, Make amortization schedule that would be suitable for both the lessor and the lessee and that covers all the years involved
What standard variable overhead rate per machine setup is : What standard variable overhead rate per machine setup is? The Six-C Corporation uses a standard costing system in which variable factory overhead
What should be investigated before making a decision : What should be investigated before making a decision about the correcting entry? Are there any other steps to take to address this issue
A company needs $35,943,750 to finance a major project in : A company needs $35,943,750 to finance a major project in the company. The company expects that next year’s earnings from current operations and the additional earnings from the new project will be a total of $45,650,000. The company currently has 5,..
What company variable overhead efficiency variance must be : What company's variable overhead efficiency variance must be? Standard direct labor hours/unit is 2; Actual direct labor hours is 10,500
What is the general relationship between risk and return : What is the general relationship between risk and return when it comes to terms of financial management. How is risk evaluated and determined to an investor
Goods and service design : From the e-Activity, examine some of the steps that are involved in designing goods and services.
What the direct labor rate variance for cottons company : What the direct labor rate variance is? In September, Cottons Company produced 1,000 units of product. 2,080 units of raw materials were used at a total cost

Reviews

Write a Review

Finance Basics Questions & Answers

  Mr spend has accumulated credit card loans of 15000 and is

mr. spend has accumulated credit card loans of 15000 and is finding it difficult to make payments. his local bank has

  What volatility smile would you expect to see

A company's stock is selling for $6.50. The company has no outstanding debt. Analysts consider the liquidation value of the company to be at least $550,000,000.

  What about depreciation

Why should Joshua and Jim consider building a portfolio by investing in real estate income property? Are there any special considerations that should be taken into account when it comes to taxation of income property? What about depreciation?

  How much will he have to save each month in years

He can afford to save $4,100 per month for the next 10 years. If he can earn a 10 percent EAR before he retires and a 7 percent EAR after he retires, how much will he have to save each month in years 11 through 30?

  How much is annual cash flow associated with the perpetuity

A perpetuity with the first annual cash flow paid at the beginning of year 4 is equivalent to receiving $100,000 in 15 years time. Assume that the perpetuity and the lump sum are of equivalent risk and that j2 = 11% pa is the appropriate interest rat..

  Prediction of shareholders decisions

How might it influence other shareholders' decisions and your prediction of other shareholders' decisions?

  What rate of return did mike earn over the year

The stock is currently selling for $60 per share. What rate of return did Mike earn over the year

  How much did you borrow for house

How much did you borrow for your house if your monthly mortgage payment for a 30 year mortgage at 6.65% APR is $1,200?

  Promises in requirements contracts

Promises in Requirements Contracts are not illusionary, even though such contracts do not specify an exact quantity of goods to be purchased.

  Examine how much equity will you get to keep as cash

You purchased a property 4 years ago for $275,000 using a 75% LTV mortgage. The mortgage was a 15 year fully amortizing FRM with a 3.8% rate.

  What forecast exchange rate would you offer to client

You provide foreign exchange consulting services on technical (chartists) analysis. You client would like to have a good idea about the U.S. dollar.

  How much should such an option sell for in the open market

Should the company buy a call option or a put option on gold? In order to avoid bankruptcy, what strike price and time to expiration would the company like this option to have?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd