Determining value of firm

Assignment Help Microeconomics
Reference no: EM1367902

A company has a EBIT to be $100,000 every year forever. The company can borrow at 5%, has no debt and a cost of equity of 15%. If the tax rate is 25 %, what is the value of the firm? What will the value be if the company borrows $130,000 and uses the proceeds to repurchase shares?

Reference no: EM1367902

Questions Cloud

Illustrate what will be profit-maximizing or loss-minimizing : illustrate what will be profit-maximizing or loss-minimizing output, Elucidate. Illustrate what economic profit or loss will industry realize per unit of output.
Why should sociocultural influences be monitored : Why should sociocultural influences be monitored and what are some of the current sociocultural forces in Europe?
Show why this equilibrium point is unique : Show why this equilibrium point is unique, i.e. if we are not at point E, illustrate what would happen in this economy.
Determine npv of retaining the existing equipment : Adele Corporation is planning the replacement of some electric generating equipment by a more efficient, technologically advanced model.
Determining value of firm : A company has a EBIT to be $100,000 every year forever. The company can borrow at 5%, has no debt and cost of equity of 15%. If the tax rate is 25 %, find out the value of the firm?
Create program for hollywood movie rating guide : Create a program for the Hollywood Movie Rating Guide,in which users continuously enter a value from 0 to 4 that indicates the number of stars they are awarding to the Guide's featured movie of the week.
How economic analysis be used as a tool to discover truth : Can Economic Analysis be used as a tool to discover truth and to assist in solution of concrete/major problems in an organization. How.
Calculate own price and cross price elasticity of demand : Calculate own price and cross price elasticity of demand - Calculate the arc cross-price elasticity of demand for B.B. Lean's deluxe garment bag.
Determining average costs : Karen runs a print shop that makes posters for large companies. It is a very competitive business. What is her AFC per poster (not per thousand!) if she prints 1000 posters? 2000? 10,000?

Reviews

Write a Review

Microeconomics Questions & Answers

  Equilibrium price-output combination

Office building maintenance plans call for stripping, waxing, and buffing of ceramic floor tiles. This work is often contracted out to office maintenance firms, and both technology and labor requirements are very basic.

  Equilibrium price and quantity change

Assume a decrease in consumers' incomes causes a decrease in the demand for chicken and an increase in the demand for potatoes. Which good is inferior and which is normal? Explain your reasons.

  Primary deficit

Explain what happens to the primary deficit in year t if the nominal interest rate in year t increases to 17%.

  How can quantity demanded be changed

What are some things that would affect changes in supply? How can quantity demanded be changed and what if the government raised the minimum wage. How would this policy effect your firm?

  Two fiscal policy options

Which of the following changes to fiscal stimulus package of 2009 for $862 billion (under the bill called American Recovery and Reinvestment Act of 2009) would have a larger overall impact on AD? Explain your answer with credible logic and analysi..

  Determining average costs

Karen runs a print shop that makes posters for large companies. It is a very competitive business. What is her AFC per poster (not per thousand!) if she prints 1000 posters? 2000? 10,000?

  Income adjustment

To maintain utility constant an income adjustment brought the student to consume the basket (61,92). What are substitution effects and the income ?

  Aggregate production and gdp in turkey

What will the economic impacts of maintaining lower CO 2 emissions in the aggregate for the Turkish economy?

  What are the corresponding prices and mucs

What are the efficient quantities for each of the two periods? What are the correspondingprices and MUCs?

  Shutdown price of operations for corporation

XYZ Corporation faces a horizontal demand curve and the market price is given to be $15. Compute the shutdown price of operations for Corporation XYZ.

  Financial ethics and compliance

What are some of the ethical dilemmas encountered by traders in their pursuit of profits for both their company and themselves?

  How would you know demand has increased

How would you know demand has increased? (What is the first piece of information which would lead you to conclude that demand has increased?)

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