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Hastings Corporation is interested in acquiring Vandell Corporation. Hastings Corporation estimates that if it acquires Vandell Corporation, synergies will cause Vandell's free cash flows to be $2.3 million, $2.9 million, $3.5 million, and $3.85 million at Years 1 through 4, respectively, after which the free cash flows will grow at a constant 6% rate. Hastings plans to assume Vandell's $10.88 million in debt (which has a 7.9% interest rate) and raise additional debt financing at the time of the acquisition. Hastings estimates that interest payments will be $1.5 million each year for Years 1, 2, and 3. After Year 3, a target capital structure of 30% debt will be maintained. Interest at Year 4 will be $1.444 million, after which the interest and the tax shield will grow at 6%. Vandell currently has 1.5 million shares outstanding and a target capital structure consisting of 30% debt; its current beta is 1.10 (i.e., based on its target capital structure). Vandell and Hastings each have a 25% combined federal-plus-state tax rate. The risk-free rate is 6% and the market risk premium is 8%.
On a typical day, ABCD corporation writes 8,000 in checks. It generally takes 3 days for those checks to clear. Each day the firm typically receives $13,000 in checks that take 4 days to clear. What is the firm's average net float?
How much would you still owe at the end of the second year, after you have made the second payment?
A Company has contracted to provide lease financing for a machine to automate an assembly line. Yearly lease payments will start at the beginning of each year.
your firm needs a computerized machine tool lathe which costs 48000 and requires 11800 in maintenance for each year of
Your company just spent $10 million developing a new product - the Aaron Rodgers bobble-head toy - and you have to decide whether or not to launch the product.
A company is considering investing up to 1.5 million dollars in an investment portfolio consisting of a set of the following five independant capital projects.
What were the major statistical characteristics of ex post mortgage returns as represented by the GLCMPI during the last three decades of the 20th century?
Explain how the effect of a weak local currency on its level of inflation.
An investor is considering a project that will generate free cash flow of $576,007 per year for 6 years. In addition to upfront costs
The daily market transactions for treasury instruments are in the billions. The current average daily volume of "Treasuries" is approximately $150 billion. Like you, corporations may have extra cash to invest.
rudolf corp.s stock price is 20 per share and its expected year-end dividend is 2 a share d1 2.00. the stocks required
A private firm has 3 million shares issued and outstanding. A Venture Capitalist (VC) investor is considering investing $2 million by purchasing convertible par
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