What is the value of the assets

Assignment Help Finance Basics

Reference no: EM133331535

Questions: There are no taxes. A company has an asset beta of 0.75. rI'he expected return on the market is 12% and the risk free rate is 4%. Its assets are expected to produce a cash?ow (EBITDA) of $100 every year starting next year. The ?rm has debt which is risk free and pays $20 every year starting one year from now.

1. What is the value of the assets? (Hint: value of something is PV of ECF at 000)

2. What is the value of the ?rln's debt? (Hint: value of something is PV of ECF at OCC)

3. Write down the ?rm's balance sheet.

4. What is the beta of the ?rm's equity? What is the OCC of the ?rms equity?

Reference no: EM133331535

Questions Cloud

How should an airport prepare to handle uas operators : What are the dangers to aircraft and airport operations from UAV operations? How should an airport prepare to handle UAS operators?

Calculate value of the company before the recapitalization : Calculate the value of the company before the recapitalization is announced using FCF method. Calculate the value of the company after the recapitalization

Discuss an example of a specific industrial cluster : Consider an example of a specific industrial cluster, explain how we can enhance the performance of this cluster in order to export more?

What is the equity in the position : The short interest is 50.50%. If the price of MRNA goes to $69.19 one year after, what is the equity in the position (at the end of the first year)?

What is the value of the assets : What is the value of the assets? (Hint: value of something is PV of ECF at 000) What is the value of the ?rln's debt? Write down the ?rm's balance sheet.

Describe customer requirements : Describes in detail customer requirements, preliminary specifications, and related technology areas competitive benchmarks.

Will your recommendation differ with this money : How will you manage it? - Look for keywords, what is their main objectives? Do they differ between the two? Can there be compromise if different?

Calculate the accounts receivable turnover ratio : Calculate the average life, average age, and asset turnover ratios. Discuss what each ratio tells you in the context of your chosen company.

What is the purpose of a discounted cash flow model : What is the purpose of a Discounted Cash Flow model? What are the three main inputs (parameters or assumptions) of a Discounted Cash Flow model?

User Account

All Pages