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or ABX Inc., the risk premium is 6% and the risk free rate is 3%. The firm’s corporate income tax rate is 30% and the debt-to-equity ratios is 40%. The total market value of debt is $120M. Its equity beta is 1.5. Its free cash flow is $30M and is expected to grow at a constant rate of 5% forever. What is the value of equity?
A. $506.09
B. $623.67
C. $358.56
D. $390.34
E. $402.41
Projects C and D are mutually exclusive and have normal cash flows. If the WACC is 12%, then they both have an NPV of -$1,000, but Project C has a higher NPV if the WACC is less than 12%, whereas Project D has a higher NPV if the WACC exceeds 12%.
If the expected return on the market is 8 percent and the risk-free rate is 4 percent, What is the expected return for a stock with a beta equal to 1.80? What is the market risk premium?
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Starting a new product or service line that will require new kinds of employees - The current plan is to use savings from reduced marketing and distribution costs for training.
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Consider two streams of cash flows, A & B. Stream A's first cash flow is $8,900 and is received three years from today. Future cash flows in Stream A grow by 4 percent in perpetuity. Stream B's first cash flow is -$10,000, is received two years from ..
What will be the total project cost for Parker Road Plaza (excluding loan commitment fees and interest carry)? What will be the total direct costs?
Financial Intermediation Look in a business periodical for news about a recent financial transaction involving two financial institutions. For this transaction, determine the following: How will each institution's balance sheet be affected? Will eith..
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a. Explain the agency problem of MNCs. b. Why might agency costs be larger for an MNC than for a purely domestic firm?
jack's oyster barn Shows you financial statements that reflect 1 million of total assets and 100,000 of liabilities and 500,000 in equity. You conclude..
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