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A company needs to immediately invest $ 800,000. With that you will perceive for the next 24 months $ 100,000 monthly with a monthly operating cost of $ 60,000.
The following is requested:
1. A bank offers you a credit of 80% of the initial investment. This credit is for a term of 24 months, with an annual interest rate of 11% payable monthly and type payments mortgage (equal monthly payment of principal plus interest). It is requested (2.1) to model the banking debt; (2.2) Calculate monthly company coverage of interest (ISCR) and total payment (DSCR); (2.3) Determine the IRR and multiple of the bank.
3. Model the net profit that remains for the company after the payment of the debt and calculate the IRR annual and multiple that is left to the company, given these returns and multiples would you take Debt?
Company plans to purchase a new equipment to improve its productivity for next 3 years. What is the monthly payment and what is the final total cost to company.
What would be Haverhill’s annual interest tax shield if it goes through with the debt issuance?
Jensen and Meckling (1976) also provide potentially important insights into the choice of Capital Structure. They discuss Agency Conflicts and the Costs associated with these them. Describe the Agency Conflicts between Corporate Managers and the Stoc..
Define “total risk” as it is used in capital structure theory. How is total risk measured?
Accounts Payable A chain of appliance stores, APP Corporation, purchases inventory with a net price of $550,000 each day. The company purchases the inventory under the credit terms of 1/15, net 30. APP always takes the discount, but takes the full 15..
Propulsion Sciences' (PS) stock dividend has grown at 10% per year for many years. Investors believe that a year from now the company will pay a dividend of $3 and that dividends will continue their 10% growth indefinitely. If the market's required r..
Which one of the following is an argument against repricing employee stock options? ESO's are originally issued with positive intrinsic value so there's no reason to reprice. Employees have more incentive when options are "under-water".
Mighty Mike is planning to save up for a trip to Europe in three years.
Compute the degree of operating leverage.Compute the degree of financial leverage.
A firm's permanent working capital refers to the. Which of the following would not be considered a capital market security?
Morin Company's bonds sell for $903.04, have a par value of $1,000, How much longer do these bonds have until maturity?
Which of the following is correct regarding agency costs?
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