Reference no: EM13974522
It is January 2nd and senior management of Chester meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and leverage changes to 2.7. Which of the following statements are true? Select all that apply.
Total liabilities will be $136,284,929
Chester’s long-term debt will rise by $10,000,000
Total Assets will rise to $218,578,172
The total investment for Chester will be $13,613,828
Working capital will remain the same at $14,177,936
|
The additional paid-in surplus account
: The December 31, 2013, balance sheet of Schism, Inc., showed long-term debt of $1,420,000, $144,000 in the common stock account and $2,690,000 in the additional paid-in surplus account. The December 31, 2014, balance sheet showed long-term debt of $1..
|
|
Arguments in favor of and against mandatory auto insurance
: What are some arguments in favor of and against mandatory auto insurance? Which would be your preference and why? What should be the main factors used to determine the amount a person pays for auto insurance? Consider such factors as driving record, ..
|
|
Solved for the cash flow in terms of the present value
: You have just purchased a home by borrowing $400,000 for 30-years at a fixed APR of 3.87%. What is the monthly mortgage payment? (Hint: A mortgage is just an annuity where the borrowed amount is the present value of the annuity. So, use the annuity f..
|
|
Equal monthly payments of compound interest and principal
: Jeff wants to purchase a new automobile. The one he has selected will cost $25,000 including all fees (e.g., tax, title, and licensing). Jeff has saved $10,000 to use as a down payment. He plans to finance the balance though a loan. The loan would be..
|
|
Decide to fully fund plant and equipment purchase by issuing
: It is January 2nd and senior management of Chester meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing $10,000,000 in bonds. Assume the bonds are issued at face value and levera..
|
|
Find net present value of these cash flows for discount rate
: A Pharmaceutical manufacture has projected net profits for a new drug that is being released to the market over the next five years: Use a spreadsheet to find the net present value of these cash flows for a discount rate of 3%.
|
|
What is total opportunity cost for the class
: Josh has decided to take a course at the local community college that could help him get a promotion at work. The course begins at 5 p.m. and goes until 9 p.m. on Monday nights. Josh normally works until 5 p.m. each day, but because of the drive time..
|
|
What is the periodic interest rate
: You have just purchased a home by borrowing $400,000 for 30-years at a fixed APR of 3.87%. The loan payments are monthly and interest is compounded monthly. What is the periodic interest rate? (I.e., what is the monthly interest rate?)
|
|
Firms estimated intrinsic value per share of common stock
: You have been assigned the task of using the corporate or free cash flow, model to estimate Petry Corporation's intrinsic value. The firm's WACC is 10.00%, its end-of-year free cash flow is expected to be $90.0 million, the FCFs are expected to grow ..
|