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!
Question - Happy Times, Incorporated, wants to expand its party stores into the Southeast. In order to establish an immediate presence in the area, the company is considering the purchase of the privately held Joe's Party Supply. Happy Times currently has debt outstanding with a market value of $230 million and a YTM of 7.1 percent. The company's market capitalization is $370 million and the required return on equity is 13 percent. Joe's currently has debt outstanding with a market value of $35 million. The EBIT for Joe's next year is projected to be $15 million. EBIT is expected to grow at 9 percent per year for the next five years before slowing to 2 percent in perpetuity. Net working E capital, capital spending, and depreciation as a percentage of EBIT are expected to be 8 percent, 14 percent, and 7 percent, respectively. Joe's has 2.3 million shares outstanding and the tax rate for both companies is 24 percent.
a. What is the maximum share price that Happy Times should be willing to pay for Joe's?
b. After examining your analysis, the CFO of Happy Times is uncomfortable using the perpetual growth rate in cash flows. Instead, she feels that the terminal value should be estimated using the EV/EBITDA multiple. The appropriate EV/EBITDA multiple is 7. What is your new estimate of the maximum share price for the purchase?
List and describe some of the challenges that a global, virtual team must overcome to be successful.
What will be the accumulated value of the cash management trustat the end of the 5years? Show your working.
Find the amount of compound interest earned in an account that opens with $24,000, earns 7.6% interest compounded daily
fargo memorial hospital has annual net patient service revenues of 14400000. it has two major third-party payers plus
Calculate the yield to maturity on the following bonds:
There are 20 flavors of ice cream and 10 types of toppings. How many different desserts can be created at this ice cream parlor?
Additionally, there is a government incentive available for this type of project if the capital cost is $5 million or more.
1 why the fed targets but does not set the fed funds rate?2 how the fed targets the fed funds rate?3 how the tools for
What factors are involved in cash flow management as they relate to various payment methods? What kinds of payment terms might the business venture have with its vendor to help manage its cash flow? Suppose you own a small business. Why might it b..
What are each of the financial statements commonly called in for-profit health care organizations and in not for-profit care organizations?
Why do these SMEs manage to get a capital injection from a venture capital company?
Describe the ways in which our current society contributes to sexual addiction and hinders individuals from experiencing authentic sexuality.
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