Uses the proceeds to repurchase shares

Assignment Help Financial Management

Reference no: EM131913631

Bruce & Co. expects its EBIT to be $91,000 every year forever. The company can borrow at 4 percent. The company currently has no debt, and its cost of equity is 11 percent. If the tax rate is 35 percent, what is the value of the company? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Value of the company $ 537727.27 What will the value be if the company borrows $136,000 and uses the proceeds to repurchase shares? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Reference no: EM131913631

Questions Cloud

What is the value of each firm : Unlevered has no debt and 3.7 million shares outstanding, currently worth $71 per share. Neither firm pays taxes. What is the value of each firm?

Calculate weighted average cost of capital : Given the following information, calculate the weighted average cost of capital.

Audit and monitoring services-authentication services : Today, several security services are increasingly provided as common security services. These include audit and monitoring services, authentication services.

What are the effects on the annuity on betty gross income : Betty died on March 31, 2012. What are the effects on the annuity on Betty's gross income and taxable income for 2012

Uses the proceeds to repurchase shares : What will the value be if the company borrows $136,000 and uses the proceeds to repurchase shares?

Operating on a list containing n different keys : Let T be the decision tree of a sorting algorithm based on comparing keys and operating on a list containing n different keys.

Discussion post - evaluating claims about sex-ed programs : Do you think that the information on your classmate's website (or article or video) is accurately represented? Why or why not - Are there other limitations to

Re-creates the original capital structure : Assume that Ms. Brown unlevers her shares and re-creates the original capital structure. What is her cash flow now?

Prepare journal entries on the arnold company books : Prepare journal entries on the Arnold Company books to record all the events noted above under each of the following bases

User Account

All Pages