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Companies D and L are idenitcal in every aspect exect that D is unlevereged while L has 15 million and 6% bonds outstanding . Assume that all the MM assumptions are met, both firms are subject to a40% federal plus state corporate tax rate , that EBIT is 10 million and cost of equity of D is 10%
1. What value would mm estimate for each firm
2. What is the required return on equity for L
3. What is the wacc
Bennet farm Equipment sales is in a highly cyclic business. Although the firm has a target payout ratio of 25%, its board realizes that strict adherence to the ratio would result in a fluctuating dividend and create uncertainty for the stockholders. ..
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A firm's dividend payout ratio is defined as the percentage of the residual cash flow paid to the shareholders in the form of a dividend.
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If the price of wheat is $25/bushel in the United States and $20/bushel in Canada, all of the following would tend to equalize prices EXCEPT:
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If the cutoff score for extending credit is a score of at least 100 points, should this applicant receive credit?
Negus Enterprises has an inventory conversion period of 62 days, an average collection period of 35 days, and a payables deferral period of 36 days. Assume that cost of goods sold is 80% of sales. Assume 365 days in year for your calculations. What i..
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