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Currently Teekay generates $150 million per year from the transportation side of its LNG shipping business. If regasification capacity is added this year, the expected annual cash flows will be $405 million per year. Teekay's cost of capital is 10%. The risk-free rate in the market is 2%. a. Calculate the value of Teekay's LNG fleet with and without regasification capacity this year. b. c. Should Teekay invest in regasification capacity for its fleet of LNG tankers this year? Global demand for LNG can change dramatically over the next year. If Teekay does not invest in regasfication capacity this year, but instead decides to invest in regasification capacity next year: if LNG demand grows next year, Teekay will invest in regasification capacity and the expected cash flows will increase to $600; if the demand falls, Teekay will not invest in regasfication and its cash flows will remain at $150 million dollars per year. d. If Teekay invests in regasification capacity next year, when the demand for LNG is known to grow, what will be the expected value of its LNG fleet? e. What is the value of the real option to delay investment in regasification capacity?
Repeat the process but assume that the second share was purchased for $110 instead of $130. Why do the rates of return differ?
A factory will generate an expected cash flow of $650,000 one year from now. After that, yearly expected cash flows from the factory will grow by 4% per year in perpetuity. The OCC for these cash flows is 11%.
A research paper of Art and Expression.
Paul is buying a new boat for $11,000. The dealer gives him an add-on loan, charging him an annual interest rate of 9.1%. If he takes a 6-year loan, what will Paul's monthly payments be?
How many of the old shares must be given up for one new share to achieve the $25 price, assuming this transaction has no effect on total market value?
Develop a price line strategy for each of these firms: (A) a college bookstore; (B) a restaurant; and (C) a video rental firm
Critically evaluate these comments. Please don't wander; concentrate on the issues stated by quotation.
Bond N also has a face value of $20,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. The required return on both these bonds is 8 percent compounded semiannually.
navigation systems inc. now has total worldwide revenues of over 500 million forecast for this coming year. you have
hillcom corp stock was 75.80 per share at the end of last year. since then it paid a 3.30 per share dividend last
How do managers supplement the NPV analysis of a project to gain a better understanding of a project? Define the term economic value added (EVA).
what is the relationship between a firms pe multiple and that firms risk and growth
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