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!
Butthole Industries is buying out Avengers, Inc. Butthole and Avengers both have market capitalizations equal to their fair value or the present value of their net cash flows. Butthole generates $45M per year in net cash flows but has no growth. Avengers is expected to generate $25M in net cash flows next year. Also, grow at 15% per year after. The return on capital of both companies over the past years:
Return on Capital
Butthole
Avengers
Year 1
-20.5%
45.8%
Year 2
41.1%
-5.8%
Year 3
10.5%
20.9%
Note that the relevant discount rate for each firm is the "average" return on capital.
A. If past history is a good indicator of future performance, what are the expected return on capital and standard deviation of return on capital for the merged entity?
B. In which of the two major dimensions this merger could possibly help Butthole: boosting the return or reducing the risk? Prove your point quantitatively.
What is the amount of five equal annual deposits that can provide five annual withdrawals, where a first withdrawal of $1500 is made at the end of year six and subsequent withdrawa
Q. Relationship between L and P? • As long as L is smaller than LB, L may change with no change in prices. In this range, there is no relation between L andP. • When L is betw
In multiple regression analysis, before testing the significance of the individual regression coefficients, (a) the intercept must equal 0. (b) the multiple standard error of the e
in the keynesian cross assume that the consumption function is given by c=200+0.75(y-t). given planned investment is 100, government purchases and taxes are both 100. then what i
why does the price level not enter desire consumption, investment and net exports of the desired aggregate expenditure function in the keynesian cross model
GKX Industries expects sales of its hydraulic seals (in inch and metric sizes) to increase according to the cash flow sequence $70+4k, where k is in years and cash flow is in $1000
what are the qualitative methods of controling credit
the production of 200 units of consumer goods and 300 units of capital goods : a) indicates full employment b) may be a result of unemployment c) may be impossible for now d)
The Concept of Taxation is explained below: Taxes are the general purpose, compulsory contributions by people to the public treasury (or national exchequer) to meet the expendi
The yeild of Maize is 73429 Hg/Ha, I need to translate it into bu/a, and I konw use 56lbs/bu as test weight. Please leave the process so that I know how to do it, thankyou.
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