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!
Q. Estimate the systematic risk of the new investment?
The beta of the comparator company will be utilized to estimate the systematic risk of the new investment. No un-gearing is essential as the asset beta of the comparator company is given. This will require to be regarded to take into account the capital structure of our company.
Re-gearing
Beta equity = beta asset*E + D(1- t))/ E
Beta equity = 0·90 *214 + 85(1- 0.3))/ 214= 1.15
Using the capital asset pricing model
ke = Rf + (Rm - Rf) beta = 6% + (14% - 6%) 1·15 = 15·20%
Cost of debt
This remains at 3·60%
Market value of equity $214m
Market value of debt $85m
Weighted average cost of capital
15·20% *214/299+ 3·60% *85/299= 11·90%
The discount rate to be utilized in the investment appraisal when diversifying into the new industry is 11·90%
Alexandria Co. Ltd has an authorized capital of Rs 25,000,000 divided into 250,000 equity shares of Rs 100 each. 100,000 shares were issued to public and Rs 80 per share were paid.
Derive the Optimal Value of Loss Function A speculative attack and the consequent currency crisis may not be due to excessive money-growth or other misaligned fundamentals, bu
Statement to ascertain profit in analysis method and comparison method, and reconstructed using ledger
Annulment of order The order may be annulled if In the opinion of the court the debtor ought not to have been adjudicated bankrupt; All the debts have been paid in fu
Profits in subsidiary company The remaining profits that belong to the holding company should be split between pre-acquisition profits and post acquisition profits. The pre
Effect of Winding-up Order The consequences of a winding-up order are: 1) Any disposition of the company's property and any transfer of shares is void, unless the court otherwis
DEEDS OF ARRANGEMENT (D of A) 1. Nature of a D of A : To avoid the expense and delay involved in a bankruptcy, a debtor in trouble may make a private arrangement with the
An investment will pay $200 at the end of every of the next 3 years, $400 at the end of Year 4, $600 at the end of Year 5, and $800 at the end of Year 6. If other investments of eq
hw
I want to do a custom dissertation on IAS 40 investment property which needs to include a brief outline, positive as well as negative international critique with respect to the sta
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: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd