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!
Erna Corp. has 7 million shares of common stock outstanding. The current share price is $79, and the book value per share is $6. Erna Corp. also has two bond issues outstanding. The first bond issue has a face value of $70 million, has a coupon of 8 percent, and sells for 94 percent of par. The second issue has a face value of $40 million, has a coupon of 9 percent, and sells for 107 percent of par. The first issue matures in 23 years, the second in 6 years. a. What are Erna’s capital structure weights on a book value basis? (Round your answer to 4 decimal places. (e.g., 32.1616)) Equity/Value Debt/Value b. What are Erna’s capital structure weights on a market value basis? (Round your answer to 4 decimal places. (e.g., 32.1616)) Equity/Value Debt/Value c. Which are more relevant, the book or market value weights? Market value Book value
Which would cause firms to start using less debt according to the tradeoff models? Which is NOT an assumption of Miller and Modigliani’s Capital Structure irrelevance theory? Optimistic Managers with good investment opportunities are likely to ______..
Investment E is a new machine tool center which would be used in an expanded assembly line in the company’s manufacturing plant. The tool center will cost $500,000 and is expected to return cash flows of $125,000 per year for five years. The company ..
Bond X is a premium bond making annual payments. The bond has a coupon rate of 8.5 percent, a YTM of 6.5 percent, and has 18 years to maturity. Bond Y is a discount bond making annual payments. What are the prices of these bonds today? What do you ex..
What is the relationship between the Net Present Value and the Profitability Index? Will they lead to the same conclusion? Why or why not?
The Missing Audit Workpapers By Dennis Greer FACTS: Major "Big 4" Certified Public Accounting firms have three sources of revenue or three divisions: Audit, tax, and Management Consulting. But the real power resides in the Audit Department because th..
What will be the dollar value of the management team's original $2 million equity investment at the time of the liquidity event?
Investors are purchasing 1-year US treasury bills (IOUs from Uncle Sam that will come due in one year) that have a nominal expected rate of return of about 2%. If inflation over the next 12 months is 5% then the real rate of return on that investment..
Mr. Husker’s Tuxedos Corp. began the year 2015 with $278 million in retained earnings. The firm earned net income of $44 million in 2015 and paid dividends of $5 million to its preferred stockholders and $14 million to its common stockholders. What i..
Essary Enterprises has bonds on the market making annual payments, with eight years to maturity, a par value of $1000, selling at $948. At this price, the bonds yield 5.9%. What must the coupon rate be at on the bonds?
Statements about the flexibility, cost and riskiness of short-term versus long term debt depend to a large extent on the type of short-term financing that is actually used. Three major types of short-term financing--accruals, accounts payable and ban..
A company has just paid a dividend of 4.8$. Its discount rate is 10.6%, and the expected perpetual growth rate is 5.6%. What is the stock's Capital Gain Yield?
Given an interest rate of 7.05 percent per year, what is the value at Year 11 of a perpetual stream of $3,800 payments that begin at Year 18?
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