Three piggies enterprises has no debt

Assignment Help Financial Management
Reference no: EM132044304

Three Piggies Enterprises has no debt. Its current total value is $76 million. Assume debt proceeds are used to repurchase equity.

Ignoring taxes, what will the company’s value be if it sells $35 million in debt? (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            $

Suppose now that the company’s tax rate is 38 percent. What will its overall value be if it sells $35 million in debt? (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: EM132044304

Questions Cloud

Which stock is more liquid and why : Which stock is more liquid and why?
Expected return and standard deviation of portfolio : What is the expected return and the standard deviation of a portfolio consisting of 20% Stock X and 80% Stock Z?
The correct cost of common equity for the firm : The current cost of common equity for the firm % Link to Text What does management believe is the correct cost of common equity for the firm?
You are able to achieve your retirement objective : To ensure that you are able to achieve your retirement objective, what percentage of your after-tax monthly income must you save?
Three piggies enterprises has no debt : Three Piggies Enterprises has no debt. Its current total value is $76 million. What will its overall value be if it sells $35 million in debt?
What is the intrinsic value and time value of option today : What is the intrinsic value and the time value of the option today? What is the break-even future stock price associated with the options?
Exchange traded funds and smart beta portfolios : The 3 innovations that you must consider are Artificial Intelligence [AI], Exchange Traded Funds [ETF] and Smart Beta Portfolios.
What must be forward price of pound for delivery one year : Assume the spot price of the British pound is currently $1.50. what must be the forward price of the pound for delivery one year from now?
What is the initial investment outlay for spectrometer : What is the initial investment outlay for the spectrometer, that is, what is the Year 0 project cash flow?

Reviews

Write a Review

Financial Management Questions & Answers

  What is an illiquidity premium

The Problem with Illiquidity- What is an “illiquidity premium”?

  What is its degree of operating leverage

Finance Corp has fixed costs of $7 million and profits of $4 million. What is its degree of operating leverage (DOL)?

  Vacant land generating insignificant amounts of income

With respect to vacant land generating insignificant amounts of income, which statement is correct?

  What is the required return for dentrix corporation

What is the required return for Dentrix Corporation? The risk-free rate is 3.2%, the risk premium is 8.1, the expected rate of inflation is 3.4% and the company can currently issue bonds at a YTM of 4.9%. The company's beta is estimated to be 1.14.

  Numerator in computing return on investment-flexible budget

A static budget report is appropriate for. The flexible budget report includes all of the following sections except. Controllable fixed costs are deducted from the contribution margin to arrive at.  The numerator in computing return on investment is

  Compute amount of cash paid to merchandise suppliers fiscal

Lowes companies, a retailer of home improvement products, reported cost of goods sold of $31,729 million for the fiscal year ended January 30, 2009. Its ported merchandise inventories of $7,611 million at the beginning of fiscal 2009 and 8,209 millio..

  How much of the new investment must be financed

To maintain the present capital structure, how much of the new investment must be financed by common equity?

  Freewill transactions and market exchange

User chargers link funds produced to particular public services-individuals pay only for the services they actually use. Why doesn't all government funding come from such freewill transactions and market exchange?

  The present value of the cash inflows is

A project has an initial investment of $204,400 and will generate 5 annual cash flows of $62,700. The present value of the cash inflows is?

  Considering the purchase of new log flume ride

The Ocean City water park is considering the purchase of a new log flume ride. The cost to purchase the equipment is 3,500,000 and it will cost an additional 250,000 to have it installed. Using the Goal Seek tool, calculate the minimum ticket price t..

  Calculate the restated cash dividend per share

Calculate the restated cash dividend per share for 2015.

  Determine annual effective yield rate on entire investment

______ is a measure of operating leverage. It is the different between a company's total sales revenue and variable costs. Ryan invest $500 into a bank account at the beginning of each year for 25 years. Determine the annual effective yield rate on t..

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