The company market value to increase

Assignment Help Financial Management
Reference no: EM131552289

In which occasion, can you expect the company’s market value to increase?

1) When the company increases the weight (%) of its owners’ equity in its capital structure by paying out its long-term debt, if all other conditions unchanged.

2) When the company’s WACC decreases, if all other conditions remain the same.

3) When the company’s risk is perceived higher by the investors & creditors, if all other conditions remain the same.

4) When a company continuously invests heavily into its current operations.

Reference no: EM131552289

Questions Cloud

How much are you willing to pay for the stock today : Given your risk-aversion; how much are you willing to pay for the stock today?
We know beta is a company-specific risk index : We know “BETA” is a company-specific risk index.
Concept of the time value of money : Which one of the following describes the concept of the Time Value of Money (TVM) most appropriately?
Describes it normal market premium or normal risk premium : Which one of the following describes it (Normal Market Premium or Normal Risk Premium) most appropriately?
The company market value to increase : In which occasion, can you expect the company’s market value to increase?
Define technical writing in your own words : Define technical writing in your own words. How would you explain technical writing to someone unfamiliar with it?
The investment will be sold for salvage : At the end of ten years, the investment will be sold for salvage of $250,000. What is the NPV at a 10% cost of capital?
What is the amount of annual payment for this debt according : What is the amount of annual payment for this debt according to the given information?
What is the amount of the interest included in your payment : If you make the payment of $400,000 at the end of the first year, what is the amount of the interest included in your payment?

Reviews

Write a Review

Financial Management Questions & Answers

  The stock is about to go ex-dividend

Miller, Inc., has declared a $7.10 per share dividend. Suppose capital gains are not taxed, but dividends are taxed at 10 percent. New IRS regulations require that taxes be withheld at the time the dividend is paid. Miller sells for $122 per share, a..

  Debt outstanding and total market value

RAK, Inc., has no debt outstanding and a total market value of $240,000. Earnings before interest and taxes, EBIT, are projected to be $26,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 18 percen..

  Total assets turnover-gross profit margin on sales

Complete the Balance sheet and sales information in the table that follows for J. White Industries using the following financial data: Total Assets Turnover: 1.5 Gross Profit margin on sales: (Sales – cost of goods sold)/Sales = 25% Total Liabilities..

  What is the current price per share of first pacific company

First Pacific Company is all-equity firm with earnings expected to be $900,000 annually in perpetuity. What is current price per share of First Pacific company.

  What is the amount of the operating cash flow

Paul's Boats has sales of $680,000 and a Net Profit Margin of 5.2 percent. The annual depreciation expense is $74,000. The tax rate is 34 percent. What is the amount of the operating cash flow if the company has no long-term debt?

  Value of the stock and the price to earnings ratio

What is the relationship between the value of the stock and the price to earnings ratio

  What is the fund appropriate benchmark

What is the name of your fund and what is the ticker symbol? What is the fund's appropriate benchmark? What are the mutual fund's top 5 holdings?

  Dividend growth model-compute cost of equity for firm

The dividend growth model can be used to compute the cost of equity for a firm in which of the following situations?

  Perpetual rate-what is the most you would pay per share

The dividend for Should I, Inc., is currently $1.50 per share. It is expected to grow at 16 percent next year and then decline linearly to a 4 percent perpetual rate beginning in four years. If you require a 12 percent return on the stock, what is th..

  The primary risk of mortgage-backed securities

Which of the following is true of the primary market? The primary risk of mortgage-backed securities is: The tax deductibility of various expenses such as general and administrative expenses:

  The present value of the projected cash outflows

The profitability index is calculated by dividing the project's net present value by the present value of the projected cash outflows.

  What is the rate of return on this investment

Consider the following Investment Opportunity: What is the rate of return on this investment?

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