Compute the book value-liquidation value-replacement value

Assignment Help Financial Management
Reference no: EM13732263

We know the following about Alloy and Brant (A&B). Total assets are $220m, D is $140m, E is $60m, preferred stock of $20m, cash is $100m and the # of shares is 1m. We estimate that the market value of equity is 2 times the book value of it. Finally, a fire sale of the firm would bring 30% of the value to the company. Compute the book value, liquidation value, replacement value and enterprise value per share of A&B.

Reference no: EM13732263

Questions Cloud

Calculate investors required rate of return today : (Bonds) A company has an outstanding issue of $1,000 face value bonds with a 9.5% annual coupon and 20 years remaining until maturity. The bonds are currently selling at a price of 90 (90% of face value). An investment bank has advised that a new 20-..
Relationship in financial information-financial condition : Explain the relationship between financial information and the financial condition of an organization. In other words, why are financial ratios and financial statements used to evaluate the health of an organization?
Financial information-financial condition of organization : Explain the relationship between financial information and the financial condition of an organization. In other words, why are financial ratios and financial statements used to evaluate the health of an organization?
Compare the two cases of owning the stock versus : We buy a put option of Florenthal, Lesser and associates. Its premium is $4 and the strike price is $44. The current market price is $50. If the price drops to $35, shall we exercise the put option? If not, why not, and If yes, why yes? Compare the t..
Compute the book value-liquidation value-replacement value : We know the following about Alloy and Brant (A&B). Total assets are $220m, D is $140m, E is $60m, preferred stock of $20m, cash is $100m and the # of shares is 1m. We estimate that the market value of equity is 2 times the book value of it. Finally, ..
Calculate the rate of return we make per annum : We have a stock Bottine and Despotakis (A&D) which we buy for $10. We keep it for 6 years at which point we sell it for $25. During the six year period, it pays us $12 which we reinvest at 5% annual return. Calculate the rate of return we make per an..
Value of put option at expiration as function of stock price : Consider a European call option that enables you to buy a share of stock at $K at time T, a European put option on the same stock with the same strike and expiration, a zero coupon bond which pays $K at time T. Graph the value of the put option at ex..
What is maximum gain and loss in this covered call position : An investor buys 200 shares of stock selling at $50. The stock now sells for $70 and the investor writes a 70 call for $3.50. What is the maximum gain and loss in this covered call position?
Medical expenses-preferred provider organization plan : Margo, age 35, was severely injured in an auto accident. She is covered under her employer’s preferred provider organization (PPO) plan. The plan has a $1000 calendar-year deductible, 80/20 percent coinsurance, and an annual out-of-pocket limit of $3..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the bonds value

A US Industries bond has an 8 percent coupon rate and a $1,000 face value. Interest is paid semi-annually, and the bond has 20 years to maturity. If investors require a 10 percent yield to maturity, what is the bond’s value?

  Why do bubbles and bursts occur in financial markets

Why do bubbles and bursts occur in financial markets? In discussing this issue, you need to focus on the rationality of investors, the availability of information to different categories of investors, and the use of historical data in financial d..

  Forms of exposure to international financial risks

Prepare a report on the management of risk in an international environment and evaluate the consequences of operational and strategic decisions in an international context and through financial analysis.

  After-tax cash flows

Find the PI. Cost of capital is 10.2%. The initial outlay is $256, 900. The following after-tax cash flows:

  Analysis of the financial statements

Analysis of the financial statements and provide a recommendation as to whether XYZ should invest or not invest in this company.

  How many months will it take you to pay off this balance

You decide to pay off your current credit card balance of $12,000 by paying $400 every month. You will add no new spending on the card. You are being charged 18% APR, compounded monthly, on the unpaid balance.  How many months will it take you to pay..

  What is the operating cash flow

Your firm has net income of $259 on total sales of $1,100. Costs are $620 and depreciation is $110. The tax rate is 30 percent. The firm does not have interest expenses. What is the operating cash flow?

  Find the modified internal rate of return

Find the modified internal rate of return (MIRR) for the following series of future cash flows. The company can reinvest the cash flows from the project at an annual rate of 4.45%. The initial outlay is $670,560.

  Contribution to its endowment fund

A college received a contribution to its endowment fund of $2 million. They can never touch the principal, but they can use the earnings. At an assumed interest rate of 9.5 percent, how much can the college earn to help its operations each year?

  Bonds discount rate is lowered

Which one of the following will occur if a bond's discount rate is lowered?

  What is the maximum it would be reasonable

What is the maximum it would be reasonable ( i.e., do no financial harm) for the owner of a building to pay for a new heated drive way system if it would save $1,500 per year in ploughing charges. The owner's cost of money is 15%/yr. Assume the syste..

  Associated with the clean-up of an environmental site

Assume that you are attempting to fund a $50,000,000 liability associated with the clean-up of an environmental site that will be due in seven years.  If you don't meet the liability you will be out of business.  You have an amount of money to invest..

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!

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