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!
Eddie’s Electronics Limited has an EBIT of $450,000 that it expects it will earn forever, and it pays all of it’s earnings as dividends to shareholders (ie., no growth). The firm has a corporate tax rate of 40% and has an un-levered beta of .90. The firm has 92,656 common shares issued and outstanding. In the market, you observe that Government T-bills are being sold to yield 4% and the S&P/TSX Composite Index is expected to yield 10%. Assuming a world of taxes and a cost for the risk of default,
a) Calculate the value of the firm.
b) Calculate the WACC for the firm.
c) What is the value of a share in the company and what is the EPS?
d) What is the value of the firm if the firm issues $600,000 of bonds at a coupon rate of 7.5%? The beta for the equity of the leveraged firm is 1.02.
e) What is the WACC for the firm with its new capital structure?
Future Value and Multiple Cash Flows- Cannonier, Inc. has identified an investment project with the following cash flows. If the discount rate is 8 percent, what is the future value of these cash flows in Year 4 ? What is the future value at a discou..
You are planning to invest $2,500 today for three years at nominal interest rate of 9 percent with annual compounding. What would be the future value of your investment?
Which one of these would not be paid from free cash flow? What is the highest marginal rate at which corporate income is taxed? Who pays taxes on earnings distributed as dividends?
First National Bank charges 13.2 percent compounded monthly on its business loans. First United Bank charges 13.5 percent compounded semiannually. As a potential borrower, which bank would you go to for a new loan? What is the future value of $2,600 ..
Upon graduation you take out a 30 year mortgage loan at 6.53% APR to buy a $750,000 house. You put down 20% of the loan amount, and expect to make monthly payments. You pay back the loan after 20 years by making one single lump sum payment. The amoun..
Cellular International zero coupon bonds (par value $1,000) mature on April 21, 2020. Calculate the yield-to-maturity if an investor purchased one of these bonds on April 21, 2014, at a price of $650.
which is more important to today's organizations? Earnings per share (EPS) are a measurgement that stockholders, stackholders and management use to evaluate a company financial health? what do companies do if they have cash flow deficit?
The one-year interest rate is 11% in the United Kingdom and 7% in Singapore. What will the spot rate be in one year according to the IFE?
You would like to buy a used car. You borrow $8,000 from your uncle and agree to repay the loan at the end of three years in a one-time payment of $9,250. What is the interest rate on this loan?
You are starting a new business, and you want to open an office in a local mall. You have been offered two alternative rental arrangements. You can pay the landlord 10% of your sales revenue, or you can pay a fixed fee of $1,000 per month. Describe t..
A financial institution is permitted to use leverage u to a maximum debt equity ratio of 20. Currently the bank finances its $100 of assets with $4.5 of equity and $95.5 of debt. If asset values fall to $91 the bank will have a capital shortage of $9..
Suppose that your unsubsidized Stafford loans plus accumulated interest total $ 33000 at the time you start repayment, the interest rate is 8% APR, and you elect the standard repayment plan of a fixed amount each month for 10 years. What is your mont..
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