Levered value of the firm with perfect capital markets

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1. A firm has $300 million of assets that includes $60 million of cash and 8 million shares outstanding. If the firm uses $30 million of its cash to repurchase shares, what is the new price per share?

A) $52.50

B) $45.00

C) $37.50

D) $30.00

2. A project will give a one-time cash flow of $22,000 after one year. If the project risk requires a return of 10%, what is the levered value of the firm with perfect capital markets?

A) $24,000

B) $16,000

C) $20,000

D) more information needed

Reference no: EM131346641

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