Compute the companys economic value added

Assignment Help Financial Management
Reference no: EM131049803

l. Bon Temps’ financial statements show the following information: Average cost of funds 10.0 % EBIT $ 500,000 Total capital $1,250,000 EPS $2.00 Shares outstanding 150,000 Marginal tax rate 30.0% (1) Compute the company’s economic value added (EVA) (2) Interpret the value you computed in part l (1). m. Suppose that normally Bon Temps’ P/E ratio is 20x. Using the information given in part (l), estimate the market price per share for Bon Temps’ common stock.

Reference no: EM131049803

Questions Cloud

Boutique sold a total of ten gift certificates : The only gift certificates that the boutique sold yesterday were worth either $10 each or $100 each. If the boutique sold a total of ten gift certificates yesterday, how many gift certificates worth $10 did the boutique sell yesterday?
Show that the time-average intensity is (i) = (p''2)/c?o : Write down the rate at which this sliver does work on the fluid just in front of it, then divide by dA to show that the time-average intensity is (I) = (p'2)/c?o.
Initial radioisotope power supply : A satellite has an initial radioisotope power supply of 70 watts (W). The power output in watts is given by P = 70e-t/250 where t is the time in days. Solve for t to find the time when the power supply is 60 W. (Round your answer to the nearest da..
Share from his employer when the stock price : Jason received 100 NQOs giving him the right to purchase 5 shares of stock for $6 per share from his employer when the stock price was $5 per share. The current share price is $15. Jason will exercise all of the options using a same-day sale.
Compute the companys economic value added : Bon Temps’ financial statements show the following information: Average cost of funds 10.0 % EBIT $ 500,000 Total capital $1,250,000 EPS $2.00 Shares outstanding 150,000 Marginal tax rate 30.0% (1) Compute the company’s economic value added (EVA) (2)..
For a professor earning : For a professor earning 87500 per year who works for a total of 42 years what is the present value of the amount she will earn if the interest rate is 4%
What specific strategies would you suggest : In the increasingly competitive healthcare environment, the effective promotion of healthcare services has become a significant component of marketing strategy. As we enter the discussion, reflect on promotional strategies that you think are mor..
Evaluate the convergence and mixing of your sampler : Derive the conditional distributions necessary to implement the Gibbs sampler. Program and run your Gibbs sampler. Use a suite of convergence diagnostics to evaluate the convergence and mixing of your sampler. Interpret the diagnostics
What is the percentage shift when ? = 90° : Compare this with the shift when the source approaches the observer head-on.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the present value of a perpetuity

What is the present value (as of month 0) of a perpetuity that pays $200 every quarter forever? The discount rate quoted on an APR basis is 10%, and the first payment will be made at the end of the year (i.e., quarter 4).

  In order to develop effective strategies it is critical to

external environmental scannbspin order to develop effective strategies it is critical to understand the marketplace

  Accounting statement of cash flows

You are researching time manufacturing and have found the following accounting statement of cash flows for the most recent year. You also know that the company paid $98.3 million in current taxes and had an interest expense of $48.3 million.

  Retired before receiving the remaining payments

Ogden Mear did an excellent job saving for retirement. He was able to save $1,000,000 in an account that pays 5 percent per year. His plan was to eventually withdraw all his money by paying himself in equal instalments every six months for the next 2..

  Evaluate the present value of the introduction of new chip

Quick Computing currently sells 16 million computer chips each year at a price of $30 per chip. It is about to introduce a new chip, and it forecasts annual sales of 18 million of these improved chips at a price of $38 each. What is the proper cash f..

  Issued for each share of outstanding stock

You currently own 5 percent of the 2 million outstanding shares of Webster Mills. The company has just announced a rights offering with a subscription price of $40. One right will be issued for each share of outstanding stock.

  Earnings per share for the two expansion alternatives

The Lopez-Portillo Company has $11.9 million in assets, 70 percent financed by debt, and 30 percent financed by common stock. The interest rate on the debt is 13 percent and the par value of the stock is $10 per share. What is the degree of financial..

  How much of each bond will you hold in your portfolio

You are managing a portfolio of $1.9 million. Your target duration is 13 years, and you can choose from two bonds: a zero-coupon bond with maturity 6 years, and a perpetuity, each currently yielding 8%. a. How much of each bond will you hold in your ..

  What is the probability of a booming economy occurring

A project's expected return is 15%, which represents a 35% return in a booming economy and a 5% return in a stagnant economy. What is the probability of a booming economy occurring if these are the only two economic states?

  Which firm is more likely to benefit from economies of scale

Max has decided to establish distributorship subsidiaries in various countries, while Marie has decided to establish manufacturing subsidiaries in various countries. Which firm is more likely to benefit from economies of scale?

  What is the firms required rate of return

ABC Company's stock has a beta of 1.32, the risk-free rate is 5.25%, and the market risk premium is 5.50%. What is the firm's required rate of return?

  This project involves researching and writing a short

this project involves researching and writing a short research paper on your choice of kaizen or balanced score card.

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