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!
Belo Horizonte Company plans to buy back 1.5 million shares of its own stock from its cash reserves at $65 a share. There will be no change in the debt of the company. This will increase the bankruptcy costs by $13 million, due to lower cash reserves of the company. Due to share buyback, the debt/assets ratio will go from 33% to 37%. The income tax rate of the company is 30%.
(A) Write two equations representing B/V of the company, before and after the share buyback.
(B) Solve them to find the initial and final value of the company.
(C) Calculate the number of shares of stock, before and after the buyback.
(D) Find the value of the stock per share after this buyback. Is the company making the right move?
A firm is considering the acquisition of a new machine. The base price is $85,000 and it would cost $15,000 to install. The machine is MACRS 3 year class property and it will be sold after 3 years for $17,000. The machine would also require an increa..
Antitrust policy can preclude the acquisition of a competitor. The dividend yield is the cash dividend divided by the current market price of the stock. Basic earnings per share include all convertible bonds outstanding. Investors will generally cho..
Electronic Products has 35,000 bonds outstanding that are currently quoted at 102.3. The bonds mature in 11 years and carry a 9 percent annual coupon. What is the firm's aftertax cost of debt if the applicable tax rate is 30 percent?
Which of the following investments will have the HIGHEST FUTURE VALUE at the end of 10 years? Assume that the effective annual rate for all investments is the same.
Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain all of its earnings. However, investors expect Simpkins to begin paying dividends, with the first dividend of $1.00 coming 3 years from today. what is..
Curly’s Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $29,000 per year forever. Assume the required return on this investment is 7.5 percent. How much will you pay for the policy?
If a firms factors their accounts receivable with recourse, then they are still liable if their customer doesn’t pay. a firm has a floating lien, then they are prohibited from selling inventory. if a firm pledges their accounts REV, then they must re..
Which of the following equations best describes the accounting identity for a not-for-profit organization?
Finance is a very challenging and rewarding field. It is exciting area because financial managers are given the responsibility to plan the future growth of the firm which can greatly affect the community in which it is doing business.
A proposed $2.5 million investment at a 70 MGY (million gallons per year) facility will save the facility $1.1 million/ year in energy costs. The equipment needs maintenance every 3 years (year 3, 6, 9), costing $300,000 and the equipment has a usefu..
What are the significant factors of Financial Statements? Discuss the various tools of financial Analysis and what is a Fund Flow Statement? Discuss the uses and preparation of Fund Flow Statements.
Could I Industries just paid a dividend of $1.92 per share. The dividends are expected to grow at a 19 percent rate for the next 3 years and then level off to a 6 percent growth rate indefinitely. If the required return is 11 percent, what is the val..
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