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!
ModMill Real Estate Company is an all-equity firm with 15 million shares of common stock outstanding worth $32.50 per share. ModMill is planning to purchase a huge track of land in southeastern Texas for $100 million. The land will subsequently be leased to tenant farmers, increasing ModMil's annual expected pre-tax earnings by $25 million in perpetuity. The firm's unlevered cost of equity capital is 12.5%. ModMill is subject to a corporate tax rate of 40%. If it were to issue debt, the interest rate on ModMill's bonds would be 8% per annum. Assume that the market is semi-strong form efficient.
(a) Suppose ModMill decides to issue equity in order to finance the purchase.
(i) What is the net present value of the project?
(ii) ModMill has just announced that the firm will finance the purchase using equity. What is the new price per share of the firm's stock? How many shares will ModMill need to issue in order to finance the purchase?
(b) Suppose ModMill decides to issue debt in order to finance the purchase.
(i) What will the market value of ModMill be if the purchase is financed with debt?
(ii) What is the price per share of the firm's stock after the debt issue?
What is the distribution of z - Create confidence intervals for each of the two variables you are trying to predict as well - Find the mean returns and the variances using the summarize or tabstat command.
Corporate profitability decline by 20 percent from 2008 to 2009. What performance percentage would you use to trigger executive bonuses for that year Why What issues would arise with hiring and retaining the best manager
Ymir Larson farms near Niffleheim, Minnesota. He works 80 hours a week. He can either grow rutabagas or raise pigs. Every hour that he spends growing rutabagas gives him $2 of income this year. Every hour that he spends raising pigs this year will..
Bob Nale is the owner of Nale's Quick Fill. Bob would like to estimate the mean number of gallons of gasoline sold to his customers. Assume the number of gallons sold follows the normal distribution with a population standard deviation of 2.30 gal..
Currently there are zero excess reserves in the U.S. banking system. If the required reserve ratio is 20 percent and the Fed sells 20 million in bonds, the maximum amount that the money supply can change is what
Evaluate the overall explanatory power of the regression model. Use a 0.05 level of significance. State all your hypotheses and explain your results. Do not use rules of thumb. calculate the F statistic to answer this question.
1-national parks are typically considered to be common national resources. since each national park has a gated
Kean University Professor Henry Saffer and Wharton School of Business Professor Dave Dhaval estimated that if the alcohol industry increased the prices of alcoholic beverages by 100 percent underage drinking would fall by 28 percent and underage b..
1. aggregate output is produced with population of workers grows according to capital stock evolves according to and
Vaguely remembering his intoductory economics course, thechief Financial officer tells the CEO it is better to produce 1case of ball bearings , because marginal revenue equals marginalcost at the quantity . what are the firms's profit /losses at t..
Which of the following is not a reason for rising health care costs? Which of the following statements about the way the government measures poverty is correct? Which of the following are explanations for income differences?
The three demand schedules in the table below show how many rounds of golf per year Lorena will demand at each price under three different scenarios. In scenario D1, Lorena's income is $50,000 per year and movies cost $9 each.
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