User Account

All Pages

Required return on green equity

Assignment Help Financial Accounting
Reference no: EM13839050

Green Manufacturing, INC., plans to announce that it will issues $1.93 million of perpetual debt and use the proceeds to repurchase common stock. The bonds will sell at par with a coupon rate of 5 percent. Green is currently an all equity firm worth $5.08 million with 330,000 shares of common stock outstanding. After the sale of the bonds. Green will maintain the new capital structure indefinitely. Green currently generates annual pretax earnings of $1.43 million. This level of earnings is expected to remain constant in perpetuity. Green is subject to a corporate tax rate of 35 percent.

Expected return is 18.30 %
Price per share is 15.40
New Share price
17.44
Shares repurchased 110665.14
New Shares outstanding
219334.86

What is the required return on Green's equity after the restructuring?

Required Return?

Reference no: EM13839050

Questions Cloud

Cold chiller corporation (ccc) has annual sales : Cold Chiller Corporation (CCC) has annual sales of $10 million, cost of goods sold of 60 percent, average age of inventory of 80 days, average collection period of 35 days, average payment period of 30 days, and purchases that are 60 percent of cost ..
List the usability heuristic items that you would consider : List the usability heuristic items that you would consider to be essential for this user evaluation; Briefly describe why you have chosen each item and what you expect it to show you.
Which do you prefer if interest rate is four percent : You are offered a choice between $770 today and $815 one year from today. Assume that interest rates are 4 percent. Which do you prefer?
The quantitative research department : Having shown your skills in the quantitative research department, your boss wants youto continue your work on stock analysis. One of the tasks the research department isinvolved in is active portfolio management, i.e., identifying mispricings and tak..
Required return on green equity : What is the required return on Green's equity after the restructuring? Required Return?
What communication strategies are associated with leadership : What communication strategies are associated with effective leadership. What are some barriers to effective communication that a leader should overcome
Which visions of art education do you think are best : Eisner's reading on "Visions and Versions of Art Education" introduces you to a variety of contemporary curricular approaches in art education. Which visions and versions of art education do you think are best? Why
Valediction: forbidding mourning : Read Donne's "A Valediction: Forbidding Mourning." Use the annotated version to assist your understanding of the poem. To get started: Choose a topic and a comparison. What will your topic be and to what can it be compared? Remember to choose a compa..
The company might do some good in the community : Write a brief letter to Ms. Lyon explaining your choice of charity, why you chose it, and how Biz Corn might partner with that organization.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Increases its selling price

Heely Company manufactures a product that sells for $50 per unit. Heely incurs a variable cost per unit of $35 and $2,400,000 in total fixed costs to produce this product. They are currently selling 200,000 units.

  Limited to the half year convention

If an item is placed in service in the first week of January, does the business get to take a full year depreciation or are they still limited to the half year convention?

  Loans and Distributions from a 401k and IRA plan

Last month a friend borrowed from his 401k to pay off his car loan. Interests on his car loan were at 8 percent with about $250 in monthly payments. The idea he said is that, instead of paying the 8 percent interest to the bank, why not take out from..

  What were szekelyi''s ethical obligations

Explain the nature of the relationship between Szekelyi and Reznor. Did a privity relationship exist between these two? Why or why not?

  Journal entries for recording transactions

Journal entries for recording transactions of disposition and purchase of asset - Prepare the journal entries to record the transactions April1 and August 1, 2007.

  Cost of goods manufactured-cost of goods sold

Cost of Goods Manufactured, Cost of Goods Sold, and Impact on Financial Statements. Calculate the Cost of Goods Manufactured. Calculate the Cost of Goods Sold

  Large mart has previously attempted to develop a study

large mart has previously attempted to develop a study pillow which would have allowed students to upload study

  What is the total of overhead applied to the production

A manufacturing company charges its overhead to products by using a predetermined application rate that is based on machine hours. What is the total of overhead applied to the production? Work In Process Inventory (Increase or Decrease)?

  Start with the partial model n the file ch10 p23 build a

start with the partial model n the file ch10 p23 build a model.xls on the textbooks web site. gardial fisheries is

  Taylor corp is growing quickly dividends are expected to

taylor corp. is growing quickly. dividends are expected to grow at a 31 percent rate for the next three years with the

  Find the unit product cost of each product

Assume that the company continues to use direct labor-hours as the bas for applying overhead cost to products - Evaluate the unit product cost of each product

  Complete the flexible manufacturing budget

Complete the flexible manufacturing budget for the relevant range value using 20,000 unit increments. All areas needed filled in except for gray shaded areas.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd