Oconnell amp co expects its ebit to be 74000 every year

Assignment Help Finance Basics
Reference no: EM13572112

O'Connell & Co. expects its EBIT to be $74,000 every year forever. The firm can borrow at 7 percent. O'Connell currently has no debt, and its cost of equity is 12 percent.

If the tax rate is 35 percent, what is the value of the firm?

What will the value be if the company borrows $125,000 and uses the proceeds to repurchase shares?

Reference no: EM13572112

Questions Cloud

Calculate the total number of bars that must be sold for : smooth-n-soft soaps sells bars of three soaps gentle goat milk lavendar soft and chamomile clean. the company has
Ms energy has a target capital structure of 30 debt 10 : ms energy has a target capital structure of 30 debt 10 preferred stock and 60 common equity. the companys after-tax
Why inflation premium and risk premium is added to real : why inflation premium and risk premium is added to real interest rate in order to arrive at value of nominal interest
Prepare an income statement for the year 2013prepare a : karise repairs adjusted trial balance december 31 2013no.account titledebitcredit101cash16000124office
Oconnell amp co expects its ebit to be 74000 every year : oconnell amp co. expects its ebit to be 74000 every year forever. the firm can borrow at 7 percent. oconnell currently
Market prices are 1035 for bonds 19 for preferred stock and : market prices are 1035 for bonds 19 for preferred stock and 35 for common stock. there will be sufficient internal
Compute the average collection period for year 2 use 365 : financial statements for pracht company appear belowpracht companynbspnbsp statement of financial position december 31
If krell is expected to pay a dividend of 088 this : krell industries has a share price of 22 today.nbsp if krell is expected to pay a dividend of 0.88 this yearnbsp and
The nichols clinic purchased a new surgical laser for 96000 : the nichols clinic purchased a new surgical laser for 96000. the estimated salvage value is 6000. the laser has a

Reviews

Write a Review

Finance Basics Questions & Answers

  Describe how peachtree complete accounting produces

financing cycle 2 pages answer the following questions.how can you create and maintain the chart of accounts?how can

  Calculate standard deviation of expected returns

A portfolio is expected to return 16% in a booming economy, 12% in a normal economy, and 22% in a recessionary economy.

  Among the following variables which one is the main driver

among the following variables which one is the main driver of the probability of default in the kmv model?a. stock

  Terminal value plays an important role in enterprise

Terminal Value plays an important role in enterprise valuation. What factors affect the estimate of Terminal Value? How sensitive enterprise valuation is to Terminal value?

  Determine the average length of firms short-term operating

pretty lady cosmetic products has an average production process time of forty days. finished goods are kept on hand for

  Determine contribution margin and projected profit

Susan Young is an attorney for a small law company in Arizona. She is also a part-time inventor and an avid golfer. One day Susan's golf foursome included a man named Henry Jones, a manufacturer of Christmas jewelry.

  Calculate the amount that jinhee needs to save each year

What is Paul's annual payment if he wants to repay hi student loans completely within 10 years and he pays a 5 percent interest rate? How much more or less would Paul pay if the loans compounded interest on a monthly basis and Paul also paid the l..

  Operating cash flows rather than accouting income are

operating cash flows rather than accouting income are listed. why do we focus on cash flows as opposed to net income

  How many additional shares can bob buy

Bob has $20,000 and want to buy the maximum amount of XYZ Stock's that he can. Hid margin A/C price XYZ is currently $30; the IMR is 45% & MMR is 25%. The broker charges 9% in loan's.

  Estimate the level of output

Given the following cost function, estimate the level of output at which the cost function is minimized, and the level of the costs.

  The real risk free rate is 3 and inflation is expected to

the real risk free rate is 3 and inflation is expected to be 3 for the next 2 years. a 2 year treasury security yields

  What is the difference between common stock and preferred

a major new client has requested that your company present an investment seminar to illustrate the stock valuation

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