Consider the financial statements below for media motors

Assignment Help Corporate Finance
Reference no: EM13381930

Consider the financial statements below for Media Motors. The firm's cost of capital is 10%. The firm is stable, and the long-term growth rate for all items is expected to be 4%. Their CEO's name is Ray Charles. Use the information below to estimate the fair market value of MM's equity as of year-end 2013.

2013 Income Statement

Sales

500

Cost of goods sold

250

SG&A expense

50

EBIT

200

Interest expense

40

Taxable income

160

Taxes

64

Net Income

96

 

2012 Balance Sheet

 

Cash

50

 

Accounts payable

70

Accounts receivable

100

 

Total current liab.

70

Inventory

200

 

 

 

Total current assets

350

 

Long-term debt

400

 

 

 

 

 

Gross fixed assets

1,000

 

Common stock

200

Accumulated depreciation

200

 

Retained earnings

480

Net fixed assets

800

 

Total equity

680

Total

1,150

 

Total

1,150







2013 Balance Sheet

 

Cash

70

 

Accounts payable

100

Accounts receivable

130

 

Total current liab.

100

Inventory

220

 

 

 

Total current assets

420

 

Long-term debt

450

 

 

 

 

 

Gross fixed assets

1,120

 

Common stock

250

Accumulated depreciation

270

 

Retained earnings

470

Net fixed assets

850

 

Total equity

720

Total

1,270

 

Total

1,270







Reference no: EM13381930

Questions Cloud

1 estimate the base case cost of each alternative regarding : 1. estimate the base case cost of each alternative regarding the provision of ultrasound services. for now ignore the
Kolby corp is comparing two different capital structures : kolby corp. is comparing two different capital structures. plan i would result in 900 shares of stock and 65700 in
Problemthe american movie company has the following sources : problemthe american movie company has the following sources of financing reported on its balance sheetliabilities amp
Problema arbitrage financial is offering an investment with : problema arbitrage financial is offering an investment with the following cash flowsyear1234cash flow200400-
Consider the financial statements below for media motors : consider the financial statements below for media motors. the firms cost of capital is 10. the firm is stable and the
Problemconsider the following informationnbspstock astock : problemconsider the following informationnbspstock astock bt-billsbeta0.61.20.0expected return 5.08.02.0a assuming
Write at six to eight 6-8 page paper in which youthe : write at six to eight 6-8 page paper in which youthe coca-cola company1. briefly describe the corporation you
Data pertaining to the current position of spruce pine : data pertaining to the current position of spruce pine medical company are as followscash
Xyz plc is a small organisation that specialises in : xyz plc is a small organisation that specialises in providing on-site cleaning services to both commercial and

Reviews

Write a Review

Corporate Finance Questions & Answers

  What is the expected return and variance of portfolio

Estimate the Optimal Portfolio assuming that no short sales are allowed and no more than 20% should be invested in a single stock. What is the expected return and variance of this portfolio? AF 426: Financial Modeling - Portfolio Models

  Prepare financial statements in proper form for sci

Prepare financial statements in proper form for SCI, including a non-consolidated statement of financial position, a statement of comprehensive income and a statement of changes in equity. Do not prepare a statement of cash flows.

  Define agency costs

Discuss and explain agency costs and describe whether these costs reduce business value.

  Preparation of necessary closing entries form the given

preparation of necessary closing entries form the given adjusting transactions.client still more operates a private

  1 campbell corporation uses baumol model to manage cash the

1. campbell corporation uses baumol model to manage cash. the cost of transferring money from a money-market fund which

  Question 1cost of debtnbsp for each of the following bonds

question 1cost of debt.nbsp for each of the following bonds calculate the after-tax cost of debt.nbsp assume the

  Prospective-payment systems

How does each reimbursement system affect the various departments of health care companies and providers and will choosing one system over another affect available funding sources

  Evaluate leverage

Evaluate Leverage keeping the short-term debt as part of total debt

  Evaluate each projects net present value

Evaluate each projects net present value, internal rate of return and payback period

  How long does the project take

Identify the critical path and its activities for Rockfest and how long does the project take

  Prepare a draft report to the board of directors

Prepare a draft report to the board of directors which identifies and briefly explains and four main factors to be considered when deciding on the appropriate mix of short, medium or long-term debt finance for Source Ltd.

  Determine the rate of inflation

Suppose the real interest rate is 3% and nominal interest rate is 8%, determine rate of inflation is the financial marketplace expecting? Explain your answer.

Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd