User Account

All Pages

Compute the current market value of abc company

Assignment Help Finance Basics
Reference no: EM132000468

The beta of the equity of ABC Company is 1.67 and ABC has a debt-to-equity ratio of 0.67 calculated at market values. The debt is risk-free and perpetual. ABC generates annual EBIT of $100 and has 100 shares of common stock outstanding. The expected return on the market portfolio is 15% and the risk-free interest rate is 5%. The corporate tax rate is 30%. Assume that personal taxes and bankruptcy costs are not relevant.

1) Compute the current market value of ABC Company.

Reference no: EM132000468

Questions Cloud

What are the amount and the correct nature of mary gain : She purchased the machine for $5000 in 2012 and claimed depreciation of $3000. What are the amount and the correct nature of Mary's gain
How many years would it be until the loan is paid off : If instead, payments of $326.89 are made at the end of each month, how many years would it be until the loan is paid off?
Present value of the operating cash flows : The project has a zero NPV when the present value of the operating cash flows equals the $2,500,000 investment.
Balance sheet of andrews company : The following data were abstracted from the 2014 December 31, balance sheet of Andrews Company:
Compute the current market value of abc company : The corporate tax rate is 30%. Assume that personal taxes and bankruptcy costs are not relevant.
What is the firms cost of equity based upon this : After that, they plan to maintain a steady 5% increase in the dividend for the foreseeable future. The current stock price is 15.45$.
What is the expected value of this stock five years from now : The required return is 8 percent and the dividend growth rate is 1 percent. What is the expected value of this stock five years from now?
Prepare a schedule computing the net cash flow : Required: Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows
What is the volume variance : Actual data show a 4.5% reduction in errors at a cost of $19,000. What is the volume variance, and is it favorable or unfavorable?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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