Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Siebel Incorporated, a non-publicly traded company, has 2009 after-tax earnings of $25 million, which are expected to grow at 6 percent annually into the foreseeable future. The firm is debt-free, capital spending equals the firm's rate of depreciation; and the annual change in working capital is expected to be minimal. The firm's beta is estimated to be 2.5, the 10-year Treasury bond is 5 percent, and the historical risk premium of stocks over the risk-free rate is 6.0 percent. Publicly-traded Rand Technology, a direct competitor of Siebel's, was sold recently at a purchase price of 10 times its 2009 after-tax earnings, which included a 25 percent premium over its current market price. Aware of the premium paid for the purchase of Rand, Siebel's equity owners would like to determine what it might be worth if they were to attempt to sell the firm in the near future. They chose to value the firm using the discounted cash flow and comparable recent transactions methods. They believe that either method provides an equally valid. Estimate of the firm's value.
a. What is the value of Siebel using the DCF method?
b. What is the value using the comparable recent transactions method?
c. What would be the value of the firm if we combine the results of both methods?
Union Brick Inc. (UBI) has a total market value of $200 million, consisting of 2 million shares of common stock selling for $50 per share and $100 million of 10 percent perpetual bonds currently selling at par. UBI pays out all earnings as dividends,..
A stock is expected to pay a dividend of $1.00 the end of the year (that is, D1 = $1.00), and it should continue to grow at a constant rate of 9% a year. If its required return is 14%, what is the stock's expected price 4 years from today?
What are the functions of securities firms? - Distinguish between the functions of a broker and those of a dealer, and explain how each is compensated.
Calculating Total Cash Flows Volbeat Corp. shows the following information on its 2015 Income Statement: Sales $267,000; Costs $148,000; other expenses $8,200; depreciation $17,600; interest expense $12,400; taxes $32,600. What is the Operating Cash ..
On January 1, 2015, Jek Corporation acquired equipment for $260,000. The estimated life of the equipment is 5 years or 40,000 hours. The estimated salvage value is $20,000. What is the book value of the asset on December 31, 2016 after two years of r..
Discuss the impact of poor cash flow on a business? Demonstrate the types of budgets / reports that are helpful in the financial management of a business.
The yield to maturity (YTM) on 1-year zero-coupon bonds is 7% and the YTM on 2-year zeros is 8%. The yield to maturity on 2-year-maturity coupon bonds with coupon rates of 11% (paid annually) is 7.7%. What is the profit on the activity?
Recall that the Par Rate is the coupon rate such that a bond sells at par.
The first two payments would be $26,000 and $24,000 in one and two years respectively, and then $16,000 per year after that for 16 years.
The primary goal of systems analysis and design is to have a clear understanding of the needs and requirements of the project so the construction/build stage is flawless.
Imagine the life after retirement: Write down the estimated amount of monthly cash ows that can support you from age 50 to say age 90. In your estimation, you may consider about your desired retirement lifestyle, your family, your social circle, the ..
A retail charge card can be accessed by writing checks against demand deposit.
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd