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Valuing a Troubled Firm: FCFF Approach
LIS Corporation, an environmental service provider, had revenues of $209 million in 2002 and reported losses of $3.1 million. It had earnings before interest and taxes of $12.5 million in 2002, and had debt outstanding of $109 million (in market value terms). There are 15.9 million shares outstanding, trading at $11 per share. The pre-tax interest rate on debt owed by the firm is 8.5%, and the stock has a beta of 1.15. The firm's EBIT is expected to increase 10% a year from 2003 to 2006, after which the growth rate is expected to drop to 4% in the long term. Capital expenditures will be offset by depreciation, and working capital needs are negligible. (The corporate tax rate is 40%, and the treasury bond rate is 7%.)
a) What is its yield to maturity? b) What will the yield to maturity be if the price falls to $725?
liquidity ratios flying penguins corp. has total current assets of 11845175 current liabilities of 5311020 and a quick
The balance sheet for Virtual Gaming Systems for 2012 and 2011 is provided below.
A linoleum producer has fixed expense of $70,000. Its product currently sells for $4 per unit and has a variable expense of $2.60 each unit.
The following were the P/E ratios of firms in the aerospace/defense industry at the end of December, 1998, with additional data on expected growth and risk.
Weisbro and Sons common stock sells for $24 a share and pays an annual dividend that increases by 4.9 percent annually. The market rate of return on this stock is 10.60 percent. What is the amount of the last dividend paid by Weisbro and Sons?
How would I find the present value of the trust fund's final value, the present value of each of the three offers, and then indicate which one has the highest present value?
You just found your dream car. The car will cost you $36,800. The dealer will lend you the entire amount at 3.9 percent interest, compounded monthly, for 48 months. What is the amount of the monthly payment?
the expected dividend is 1.50 for a share of common stock priced at 15. what is the cost of internal common equity if
investors require a rate of return of 12 percent. at what price will the stock sell if the next expected dividend d1 is
A differential manometer is used to measure the pressure change caused by a flow constriction in a piping system as shown. Determine the pressure difference between points A and B in psi. Which section has the higher pressure?
Describe how people can identify their federal tax brackets
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