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For the most recent fiscal year, book value of long-term debt at Schlumberger was $15343 million. The market value of this long-term debt is approximately equal to its book value. Schlumberger’s share price currently is $56.4. The company has 1,000 million shares outstanding.
What is the market value of the company to its bondholders and shareholders?
Do not round at intermediate steps in your calculation. Express your answer in millions of dollars. (Thus, for example, you would enter $120,340,000 as 120.34 in Canvas.) Round to two decimal places. Do not type the $ symbol.
Advice: this problem gives you debt in millions of dollars and shares outstanding in millions of shares. If you work in millions from start to finish (rather than expanding out the numbers to dollars as you work), then you can avoid the hassle of converting back to $ millions.
Calculate the time taken for this investment to treble in value to $3,000 at an interest rate of 2% per annum compounded annually.
Which of the following is/are decisions which a mortgage borrower must consider?
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The Montana Hills Co. has expected earnings before interest and taxes of $8,100, an unlevered cost of capital of 11%, and debt with both a book and face value of $12,000. The debt has an annual 8% coupon. The tax rate is 34%. What is the value of the..
When should the firm undertake the project if the discount rate is 5 percent
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Which of the following will likely cause the market value of a bond to increase?
Pippi’s Puppies Inc. has an unlevered beta of 0.80. The firm currently has no debt, but is considering changing its capital structure to be 30% debt and 70% equity. Its corporate tax rate is 30%, rRF = 4% and the market risk premium is 5%. What is th..
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