What should the value of the equity be

Assignment Help Financial Accounting

Reference no: EM13754360

Suppose you borrow $50000 when financing a coffee shop which is valued at $75000. You expect to generate a cash flow of $84000 if demand is as expected. The cost of debt rate is 4%.

What should the value of the equity be?

Reference no: EM13754360

Questions Cloud

Shareholders of financing project out of retained earnings : Axon Industries needs to raise $9.5M (or $9,500,000)for a new investment project. If the firm issues one-year debt, it may have to pay an interest rate of 8%, although Axon's managers believe that 6% would be a fair rate given the level of risk. What..

Explian test plan or script : Testing process summary: Define a test plan or script that identifies major software functionality and hardware to be tested with the required outcomes

What is the cost of equity : Suppose you borrow $50000 when financing a coffee shop which is valued at $75000. You expect to generate a cash flow of $84000 if demand is as expected. The cost of debt rate is 4%. What is the cost of equity?

Describe the events nullification controversy and bank war : Describe the events Nullification Controversy, The Peggy Eaton Affair, the Red Stick War and Bank War.

What should the value of the equity be : Suppose you borrow $50000 when financing a coffee shop which is valued at $75000. You expect to generate a cash flow of $84000 if demand is as expected. The cost of debt rate is 4%. What should the value of the equity be?

Evaluating the balance between security and accessibility : The amount and kinds of risks that organizations accept after evaluating the balance between Security and accessibility and applying the controls, is called

What should be the cost of equity of your firm : Suppose you borrow $8000 when financing a coffee shop which is valued at $30000. Assume that the unlevered cost equity of the coffee shop is 15% and that the cost of debt is valued at 5%. What should be the cost of equity of your firm?

What are the budgeted cash receipts from sales on account : Win Bicycles, Inc. collects 25% of its sales on account in the month of the sale and 75% in the month following the sale. If sales on account are budgeted to be $16,000 for March and $65,500 for April, what are the budgeted cash receipts from sales o..

Operating expenses associated with the old machines : Hip Duds Company is considering the purchase of new machines on January 1, 2015. Trail Power has been using the same machines to make its name brand clothing for the last five years. A cost efficiency consultant has suggested that production costs ma..

User Account

All Pages