What is the debt-to-value ratio

Assignment Help Financial Management
Reference no: EM131528527

Edwards Construction currently has debt outstanding with a market value of $87,000 and a cost of 8 percent. The company has EBIT of $6,960 that is expected to continue in perpetuity. Assume there are no taxes. a-1. What is the value of the company's equity? (Do not round intermediate calculations. Leave no cell blank - be certain to enter "0" wherever required.) Value of equity a-2. What is the debt-to-value ratio? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Debt-to-value ratio b. What are the equity value and debt-to-value ratio if the company's growth rate is 3 percent? (Do not round intermediate calculations and round your "Debt-to-value" answer to 3 decimal places, e.g., 32.161.) Equity value $ Debt-to-value c. What are the equity value and debt-to-value ratio if the company's growth rate is 7 percent? (Do not round intermediate calculations and round your "Debt-to-value" answer to 3 decimal places, e.g., 32.161.) Equity value $ Debt-to-value

Reference no: EM131528527

Questions Cloud

Determine the safety stock and reorder point : Determine the safety stock and reorder point corresponding to a 90% service level.
How does dell operate with such a low current ratio : How does Dell operate with such a low current ratio? Why does Dell operate with such a low current ratio?
Tool manufacturing has an expected ebit : Tool Manufacturing has an expected EBIT of $ 38,000 in perpetuity and a tax rate of 36 percent.
Optimal order size and minimum total annual inventory cost : Determine the optimal order size and the minimum total annual inventory cost.
What is the debt-to-value ratio : What is the value of the company's equity? What is the debt-to-value ratio?
Weston industries has debt-equity ratio : Weston Industries has a debt-equity ratio of 1.5. Its WACC is 12 percent, and its cost of debt is 10 percent.
Arithmetic and geometric returns for stock : What are the arithmetic and geometric returns for the stock?
What is the standard deviation of the stock returns : What is the standard deviation of the stock’s returns?
Low-volatility project is undertaken-high-volatility project : What is the expected value of the company if the low-volatility project is undertaken? The high-volatility project?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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