User Account

All Pages

Review case of the dgf corporation

Assignment Help Finance Basics
Reference no: EM131690208

Question: DGF Corporation has come to you for some advice on how best to increase their leverage over time. In the most recent year, DGF had EBITDA of $ 300 million, owed $ 1 billion in both book value and market value terms, and had a net worth of $ 2 billion (the market value was twice the book value). It had a beta of 1.30, and the interest rate on its debt is 8% (the treasury bond rate is 7%). If it moves to its optimal debt ratio of 40%, the cost of capital is expected to drop by 1%.

a. How should the firm move to its optimal? In particular, should it borrow money and take on projects or should it pay dividends/repurchase stock?

b. Are there any other considerations that may affect your decision?

Reference no: EM131690208

Questions Cloud

Characteristic doctrines of the enlightenment : Part 1: Some of the more characteristic doctrines of the Enlightenment focused on the power and goodness of human rationality:
What was your child excited about : What was your child excited about? What specific aspects of the stories made an impact on your child?
Collected free-format customer feedbacks : The organisation that you selected had collected free-format customer feedbacks over the years and will like to do a text mining project to understand their cus
Depiction of jay gatsby and people in gatsby life : In The Great Gatsby, what does F. Scot Fitzgerald suggest about the state of the American Dream, the people who pursue it
Review case of the dgf corporation : DGF Corporation has come to you for some advice on how best to increase their leverage over time. In the most recent year, DGF had EBITDA of $ 300 million.
Work process flowchart analyzed : the company that the assignments should be done at is called Mideast Data Systems-Oman - This is the guideline for research project
Damages are typically awarded for pain suffering-lost wages : Compensatory damages are typically awarded for pain suffering and lost wages
Discuss what should be considered when designing instruction : In light of Ausubel's assimilation theory, discuss what should be considered when designing instruction for a simple task like painting a wall.
What is malcolm x significance for their religious tradition : What is his/her significance for their religious tradition? What would you argue are his/her main contributions toward his/her tradition?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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