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A company has the following securities outstanding:
- 1 million shares of common stock. The shares are priced such that the firm's P/E multiple is 10, i.e. the price per share is 10 times the earnings per share.
- 1,000 perpetual bonds, each with a face value of $1,000, a coupon rate of 10% (paid once a year) and a current yield (an effective annual rate) of 8%. These bonds will pay annual interest every year for ever and there will be no principal paid back. (happens at infinity). The firm has EBIT every year, of 500,000, and pays out all of its net income as dividends. The tax rate is 30%. The risk free rate and the expected risk premium on the market are both 7%.
1. What is the current market value of the firm's equity and debt?2. What is the required rate of return on the firm's equity? What is the beta of the equity?3. What is the firm's after tax WACC?
analysis of acceptance of special order w.r.t relevant.relevant costs special sales order-idle versus full capacity
1.nbsp the costs of doing business through the sale of goods and services are called.a. net incomeb. expenses.c.
The Gilster Company, a machine tooling firm, has several plants. One plant, located in St. Falls, Minnesota, uses a job order costing system for its batch production processes. The St. Falls plant has two departments through which most jobs pass. Pla..
What is the firm's net income after taxes - If the company's tax rate was 34 percent, what is its net income after taxes?
Scottish Elements Inc. sells 30,000 units per year of its main product. One of the main components of this product is also manufactured by the company. The company is considering purchasing this component to an external supplier.
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Please be detailed with your response. Some of the employee information in your business has been compromised due to unauthorized access to your HRIS system. What process would you create to address this type of scenario? Examine and explain how you..
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information on huntington power co. is shown below. consider the companys tax rate is 33 . debt 5500 5 coupon bonds
Calculate the project's NPV at a cost of capital of 8%. Calculate the project's IRR and what concerns might Jason and Sons have regarding this project beyond considering the financial calculations?
What is the total estimated direct labor cost for July assuming the direct labor workforce is adjusted to match the hours required to produce the forecasted number of units produced
question bizarro sound company discovered a scam whereby one of its front office administrative employees used company
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