Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Marston Marble Corporation is considering a merger with the Conroy Concrete Company. Conroy is a publicly traded company, and its current beta is 1.30. Conroy has been barely profitable, so it has paid an average of only 20 percent in taxes during the last several years. In addition, it uses little debt, having a target debt ratio of just 25 percent, with the cost of debt 9 percent. If the acquisition were made, Marston would operate Conroy as a separate, wholly owned subsidiary. Marston would pay taxes on a consolidated basis, and the tax rate would therefore increase to 35 percent. Marston also would increase the debt capitalization in the Conroy subsidiary to 40 percent of assets, and pay 9.5 percent on the debt. Marston's acquisition department estimates that Conroy, if acquired, would generate the following free cash flows and interest expenses (in millions of dollars):These cash flows include all acquisition effects. Marston's cost of equity is 14 percent, its beta is 1.0, and its cost of debt is 10 percent. The risk-free rate is 6 percent, and the market risk premium is 4.5 percent.a. What discount rate should be used to discount the estimated cash flows and tax shields in Years 1-5 to discount the horizon value?b. What is the dollar value of Conroy's operations? If Conroy has $10 million in debt outstanding, how much would Marston be willing to pay for Conroy?
Automated Manufacturers uses high-tech equipment to produce specialized aluminum products for its customers. Each one of these machines costs $1,480,000 to purchase plus an additional $52,000 a year to operate.
An investor put 40% of her money in Stock A and 60% in Stock B. Stock A has a beta of 1.2 and Stock B has a beta of 1.6. If the risk-free rate is 5% and the expected return on the market is 12%, what's the investor's expected return?
a movie company wishes to measure the effect of advertising on box of?ce receipts. thirty u.s. cities with similar
Medtrans is A profitable company that is not paying a dividend on its common stock. James Weber, an analyst for A. G. Edwards, believes that Medtrans will begin paying a $1.00 per share dividend in two years and that the dividend will increase 6 perc..
lopez information systems is planning to issue 10-year bonds. the going market rate for such bonds is 7.53 percent.
Considering Google's external and internal environmental conditions, does a SWOT analysis reveal any insights to enhance the company's efforts to compete or improve performance? Write around a 1,300 - 1550 Paper. Be sure to include a referenc..
read the ethics case a sad tale the demise of arthur anderson located in the wileyplus week fundamentals of corporate
Make conclusions (10-15 statements) and prepare a presentation (Notes to the financial statements published in Annual reports will help you);
Management also decided to Created a provision on Doubtful Debts @10% on total Debtors. Create a Op.Laedger of the Debtors & Passed the necessary Journal Entries.
a. Calculate the total return (including the capital gain and dividend yield) for the company stock over the last one year, five years and ten years.b. Calculate the return on comparable market index for the same periods. Did the stock outperform or ..
trevor price bought 10-year bonds issued by harvest foods five years ago for 942.69. the bonds make semiannual coupon
how is the marginal cost of the various component capital sources
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd