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!
CAR Inc. will be liquidated in one year. The value of CAR’s assets is currently $650 million, and next year it will be either $825 million or $400 million. Before shareholders can be paid next year, CAR will have to repay $500 million of debt. (I.e. CAR has zero coupon debt outstanding with exactly one year to maturity and a total face value of $500 million.) The risk free rate is 4%.
a) What is the current value of CAR’s equity?
b) What is the current value of CAR’s debt?
Hot Wings, Inc., has an odd dividend policy. The company has just paid a dividend of $8.50 per share and has announced that it will increase the dividend by $6.50 per share for each of the next four years, and then never pay another dividend. Require..
The Black Bird Company plans an expansion. The expansion is to be financed by selling $32 million in new debt and $71 million in new common stock. The before-tax required rate of return on debt is 11.74% percent and the required rate of return on equ..
A firm has earnings before interest and tax of $25380 with net income of $14220 the taxes amounted $5400 for the year. During the year the firm paid out $43800 to pay off existing debt and then later borrowed an additional $24000 what is the amount o..
An investor enters into a short forward contract on 100 million yen. The forward exchange rate for US$ 1 is set at US$0.012 per yen. How much does the investor lose or gain if the exchange rate at the end of the contract is (i) US$0.011 per yen, and ..
the firm manufactures a global positioning system gps that sells for 2000 with cost of goods sold hardware 30 and
You are given the following probability distribution of returns for stock J: A probability of .2 that the return will be 12%; a probability of .35 that the return will be 18%; a probability of .3 that the return will be -10%; and a probability of .15..
Based on the volatility smile usually observed in the market for exchange rates, which of these estimates would you expect to be too low and which would you expect to be too high?
The company is choosing between machine A and B (they are mutually exclusive and the company can only pick one). The initial cost of machine A is $400,000 and it will last for 7 years before it needs to be replaced. Calculate the 7 year and 5 year an..
The building and the land it sits on will cost $250,000 and you have 20% to put down on the property. Annual taxes are $6,000 and fire and liability insurance is $3,600. You need to purchase three times the number of planned seats for turn-around and..
A firm has a net income before interest and taxes of $193,000 and interest expense of $28,000. What is the times-interest-earned ratio? And if the firm's lease payments are $48,500, what is the fixed charge coverage?
Two years ago Abilia purchased a $13,000 car; she paid $2,500 down and borrowed the rest. She took a fixed rate 60-month instalment loan at a stated rate of 7.0% per year. Interest rates have fallen during the last two years and she can refinance her..
Rate of Return If State Occurs State of Probability of Economy State of Economy Stock A Stock B Stock C Boom .65 .11 .19 .37 Bust .35 .12 .06 −.05 a. What is the expected return on an equally weighted portfolio of these three stocks?
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