Find the price per share of equity

Assignment Help Financial Management

Reference no: EM131617136

Kyle Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 785,000 shares of stock outstanding. Under Plan II, there would be 535,000 shares of stock outstanding and $10.25 million in debt outstanding. The interest rate on the debt is 12 percent, and there are no taxes.

Use M&M Proposition I to find the price per share of equity. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Share price:

What is the value of the firm under Plan I? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Round your answer to the nearest whole number, e.g., 32.)

Value of the firm :

What is the value of the firm under Plan II? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Round your answer to the nearest whole number, e.g., 32.)

Value of the firm $ :

Reference no: EM131617136

Questions Cloud

Calculate per gallon storage cost and accrued interest : calculate per gallon storage cost, accrued interest, total carrying cost, and future price of palm oil for delivery in three months.

What the value of the initial forward contract is : What are the forward price, and change in forward price from six months ago. Briefly describe in words what the value of the initial forward contract is.

What is the company cost of equity : What is the company’s cost of equity? If the firm converts to 60 percent debt, what will its cost of equity be?

Value of the firm-what is the current value of company : Calvert Corporation expects an EBIT of $21,000 every year forever. What is the current value of the company?

Find the price per share of equity : What is the value of the firm under Plan I? Use M&M Proposition I to find the price per share of equity.

An american company would like to borrow fixed-rate yen : An American company would like to borrow fixed-rate. What is total cost savings which can be realized through an interest rate/currency swap between the two?

What will be its optimal cash replenishment level : What will be its optimal cash replenishment level?

What is the value of equity and price per share : What is the weighted average cost of capital of the company? What is the value of equity and price per share?

Prices are affected by differences in time to expiration : Explain How swaption exist and give examples of how they are used. How option prices are affected by differences in time to expiration.

User Account

All Pages