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Establishment Industries borrows $890 million at an interest rate of 8.5%. Establishment will pay tax at an effective rate of 35%. What is the present value of interest tax shields if:
a. It expects to maintain this debt level into the far future? (Enter your answer in millions of dollars rounded to 1 decimal place.)
Present value $_____ million
b. It expects to repay the debt at the end of 5 years? (Enter your answer in millions of dollars rounded to 2 decimal places.) Present value $ ________million
c. It expects to maintain a constant debt ratio once it borrows the $890 million and rAssets = 10%? (Do not round intermediate calculations. Enter your answer in millions of dollars rounded to 2 decimal places.) Present value $ ____ million.
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You are borrowing $6,000 today. The loan is an amortized 6-year loan with an APR of 8 percent. The loan requires that $1,000 of the principal amount be repaid each year. Payments are to be made annually. What is the amount of the interest for the thi..
A pound call option with a strike price of $1.5 per euro is priced (i.e., the option premium) is at $0.04 per euro. The spot price is $1.45 per pound. What is the intrinsic value of the option? What is the profit or loss for the buyer of the call opt..
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Market Value Ratios Lab R Doors' year-end price on its common stock is $58. The firm has total assets of $78 million, the debt ratio is 52%, no preferred stock, and there are 4.3 million shares of common stock outstanding. Calculate the market-to-boo..
If you plan and save adequately for retirement, which of the following is likely to provide the bulk of your retirement income needs?
What is the total return of the TIPS in dollars? What is the total return of the TIPS in percentage?
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