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Question 1:
CSMAR is a leading financial data provider and aims to acquire its direct competitor, Wind Data. The CSMAR estimate Wind Data has sales of $40 million and after-tax income of $4 million this year. Wind Data has the debt to equity ratio is 20%, and the after-tax income is expected to grow at 15% per annual for the next 3 years and 5% per annual thereafter. Capital expenditures are expected to grow in line with depreciation and working capital requirements are minimal. The average beta of publicly traded companies in the financial data provider industry is 2 and the average debt/equity ratio is 50%. The Wind Data is managed very conservatively and does not intend to issue new debt and change its D/E ratio through the foreseeable future. It has no preferred stock as well. The current risk free rate is 5% and the tax rate is 30%. The market return is believed to be 11% on average for the next three years. Reflecting the slower growth rate in the fourth year and beyond, the firm's discount rate is expected to decline to the industry average cost of equity of 10.4%. Estimate the value of Wind Data's equity. Show all your workings.
Twin Oaks Health Center has a bond issue, Determine the current value of the bond if present market conditions justify a 14 percent required rate of return.
A number of techniques can be used, most of which involve historical data. Explain these techniques include the judgmental technique?
Describe the characteristics of equity funds such as ordinary and deferred shares, share options and internal funds. Explain in detail
The bank accepted an equity interest in Saul Company in the form of 200,000 ordinary shares quoted at P20 per share. Compute the Total cost
Prepare the journal entries to record all transactions occurred in year 2016. Show all your workings. Su Oven Ent is an oven dealer. Other than selling ovens
Garl Inc. provided you with the following information: Year 2013 - Accounting Income $1,500,000. Journal entry to Record Income tax for 2013 and 2014
Question - A company reported cost of goods sold of $1,760,000 for the year. How much is the cash paid for merchandise purchased during the year
The land had a basis to Cardinal Company of $1,000,000. Illustrate what amount of loss does Cardinal recognize in the exchange and what is Robin's basis in the land she receives? The distribution was non pro rata to Robin, a related person.
Record the journal entry for SPACtacular Inc.'s tax expense, taxes payable, and deferred tax assets or liabilities. SPACtacular Inc. acquired Druggy McBiotech.
Crawford Company has the following equivalent units for July: materials 20,000 and conversion costs 18,000. Production cost data are: Materials Conversion Work in process, July 1 $ 3,200 $ 1,500 Costs added in July 25,200 21,000 The unit production c..
What the amount of Bad Debts Expense to be shown in the Statement of Comprehensive Income for the year ended December 31, 2019 is?
The bank loan committee assigns credit risk premiums of 2% for companies like this. What is the after-tax cost of debt for Smith Brothers?
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