User Account

All Pages

What is the value of the company

Assignment Help Finance Basics
Reference no: EM132467180

Problem: Maris Corp has an EBIT rate of $2,000,000 per year that is expected to continue in perpetuity. The unlevered cost of equity for the company is 14% and the corporate tax rate is 30%. The company also has a perpetual bond issue outstanding paying 6% interest with a market value of $2,000,000.

What is the value of the company? $ (accurate to $1)  

Hint: Compute the all-equity value of the company and adjust for the debt tax shield using MM II with taxes.

Reference no: EM132467180

Questions Cloud

Discount hurdle rate-bath supplies corp : Bath Supplies Corp.'s capital structure is 60% debt and 40% equity. The company is planning to build a plant to manufacture a new type of organic toothpaste
Eps before and after the change in capital structure : Calculate the EPS before and after the change in capital structure and indicate changes in EPS. (Round your answers to 2 decimal places.)
Identifying key strategic approach that deliver objectivw : Identifying the key strategic approach that will deliver the objectives. Identifying customer needs and determining opportunities
What is the decrease in the value of the company : What is the decrease in the value of the company due to expected bankruptcy costs? $ (accurate to $1)
What is the value of the company : The company also has a perpetual bond issue outstanding paying 6% interest with a market value of $2,000,000.
Discuss the ethics of doing business in cultural relativism : Discuss the ethics of doing business in another country and cultural relativism.Would his actions be considered unethical in the United States?
Why cost classifications important in managerial accounting : Describe the basic differences in marketing tangible from intangible products. Also, think about your current/past employer (or any company of your choice).
What is the basic customer need provided by dunkin donuts : What is the basic customer need provided by Dunkin' Donuts (DD) Sandwiches?Describe the typical customer purchasing behavior for Dominos
Calculate sustainable growth : Construct pro-forma statements using the % of Sales Method (costs, all assets, and current liabilities rise with sales) assuming the dividend payout rate

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd