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Will provide 150-180 words here.
1. About 25 years ago, when Japanese companies were "eating our lunch", many analysts noted that those companies had highly leveraged capital structures -- lot's of debt and little equity. Looking at the WACC formula suggests that more debt relative to equity might lower WACC. Is leverage "always" good or "always" bad? If it depends on the industry, please suggest which ones would be expected to have greatest and least leverage.
2. Imagine two independently owned gas stations standing next to each other and selling gas (and other goods) at about the same price, so they have the same revenues, cost structure and effective tax rate of 35%. Assume that every year they have average EBIT of $ 500,000 (I know, it's quite optimistic) without any anticipated growth. One owner finances all operations out of own pocket, while another borrows $ 500,000 for five years and refinances this debt every five years without repaying principal.Discuss the difference in value (if any) of these two stations.
Calculate, for each project, the return on capital employed (ROCE), net present value (NPV), internal rate of return (IRR) and payback period. State which project, if any, you would recommend. Give your reasons.
Why should companies use a project's net cash flows rather than its accounting income when determining a project's NPV? What are the major types of project risk?
What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?
You decide to take out an ordinary interest loan of $30,000 at 4%, on a 90 day note. a.) In 45 days you decide to make a payment of $10,000 on the loan. What is your new principal? Explain how you got the answer. b.)How much did you pay at the end of..
a property worth 1500000 is to be sold by its owner. the owner wants to be paid in two payments - one payment now and
It is now time to prepare your final report, summarizing the findings and analysis that you conducted over the past few weeks. Your report should include the following: Las Vegas Sands Corporation
The board of directors of Akin & Gump, Inc., investment bankers is meeting to address the concerns of stockholders. How is preferred stock similar to common stock? How is preferred stock similar to debit?
The second discount rate is known as the social discount rate. It is based on judgments about the collective value that society attaches to a policy. Proponents argue that the social discount rate is preferred because it broadens the preferences cons..
In the current year, Melissa, a single employee whose AGI is $100,000 before any of the items below,ncurs the following expenses.
You purchase 1,000 shares of Spears Grinders, Inc. stock for $45 per share. A year later, the stock pays a dividend of $1.25 per share, and it sells for $49.
A company has evaluated two product development projects and determined their expected lifetime income given a set of events.
Describe the directional effect (increase, decrease, or no effect) of each transaction on the components of the book value of common shareholders' equity shown in the chart on the next page.
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