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McDavid Machinery Corp is an unlevered firm. The current market value of its equity is $17.5 million.
a. If there are no taxes and the EBIT is $2,012,500, what is the cost of equity? What is the WACC?
b. If the tax rate is 35%, what is the EBIT if the unlevered cost of equity is 11.5%? What is the WACC? (Assume there is no cost of financial distress and general M&M assumptions apply)
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What is the market rate of interest associated with this perpetuity?
You have found an asset with a 13.60 percent arithmetic average return and a 10.44 percent geometric return. Your observation period is 30 years. What is your best estimate of the return of the asset over the next 5 years? 10 years? 20 years?
Telfony Inc. expects an EBIT of $4,000,000 for the current year. The firm's capital structure consists of 40% debt and 60% equity, and its marginal tax rate is 40%. Comparer and contrast tax-preference, bird-in-hand, and clinetele effect theoriesof d..
What is the firm's balance of current assets?
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Prepare the for January through March and determine the balances in the following accounts as of March
Evil Pop, Inc., has an average collection period of 37 days. Its average daily investment in receivables is $89,600. Assume 365 days per year. What is the receivables turnover? What are annual credit sales?
If the stock sells for $38 a share, what is your best estimate of ABC's cost of equity?
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