Assume debt proceeds are used to repurchase equity

Assignment Help Financial Management

Reference no: EM131349249

Three Piggies Enterprises has no debt. Its current total value is $75.2 million. Assume debt proceeds are used to repurchase equity.

Ignoring taxes, what will the company’s value be if it sells $34.6 million in debt? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Round your answer to the nearest whole number, e.g., 32.)

Value of the firm $

Suppose now that the company’s tax rate is 30 percent. What will its overall value be if it sells $34.6 million in debt? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Round your answer to the nearest whole number, e.g., 32.)

Value of the firm $

Reference no: EM131349249

Questions Cloud

How can you not include all of your social security benefits : If you include all your Social Security benefit in the calculations, you'll be paying too much. How can you not include all of your Social Security benefits?

What does it take to be a good leader or manager : What does it take to be a "good" leader or manager - What are the primary barriers and challenges associated with health care leadership?

Validate an idea with your own experience about research : Healthy relationships form the basis for a positive workplace. When staff are engaged in their jobs, supported by one another, and feel a sense of security in their work, healthy relationships among staff members will flourish. Nurse managers can ..

Describe the motivational factor that influenced : After reviewing the video, http://www.ted.com/talks/dan_pink_on_motivation think of a project team or organizational setting with which you have been associated and answer the following questions: Describe the motivational factor that influenced t..

Assume debt proceeds are used to repurchase equity : Three Piggies Enterprises has no debt. Its current total value is $75.2 million. Assume debt proceeds are used to repurchase equity. Ignoring taxes, what will the company’s value be if it sells $34.6 million in debt? Suppose now that the company’s ta..

Evaluate the rate for the lowest allowed transition : Repeat the calculation of scattering rates, supposing that the initially flat-bottomed well was suddenly tilted by an electric field F = 1 MV m-1. How is this calculation related to that in Section 7.2.2 for the energy levels of a quantum well in an..

What would new debt ratio be if machine were leased : Suncoast Healthcare is planning to acquire a new X-ray machine that costs $200,000. The business can either ease the machine using an operating lease or buy it using a loan from a local bank. What is Suncoast's current debt ratio? What would the new ..

Schema structures are used in data marts : Just for Discussion: what schema structures are used in data marts and and what are the data scopes of the two (warehouse and mart)?

Authors asserted that business productivity : 1. According to the text, the authors asserted that business productivity and cost reduction were the top concerns by a wide margin among the top five (5) management concerns. Give your opinion on whether or not you agree with this assertion. Just..

User Account

All Pages