What is the value of patricks stock

Assignment Help Accounting Basics
Reference no: EM131031425

1. Patrick Company expects to generate free-cash of $120,000 per year forever. If the firm's required return is 12 percent, the market value of debt is $300,000, the market value of preferred stock is $70,000, and the company has 100,000 shares of stock outstanding. What is the value of Patrick's stock?

a. $7.00
b. $9.70
c. $6.30
d. $10.00 

Reference no: EM131031425

Questions Cloud

Determine the final temperature and pressure in the tank : An insulated rigid tank is divided into two equal parts by a partition. Initially, one part contains 4 kg of an ideal gas at 800 kPa and 50°C, and the other part is evacuated.
The issue pays interest annually : A firm has an issue of $1,000 par value bonds with a 12 percent stated interest rate outstanding. The issue pays interest annually and has 10 years remaining to its maturity date. If bonds of similar risk are currently earning 8 percent, the firm's b..
Determine the paddle-wheel work done : During the process 20 Btu of heat is lost to the surroundings. Determine the paddle-wheel work done. Neglect the energy stored in the paddle wheel
Identify the location of firms and households : Identify the location of firms and households. List and explain the three major problems in using the CPI as a measure of the cost of living
What is the value of patricks stock : Patrick Company expects to generate free-cash of $120,000 per year forever. If the firm's required return is 12 percent, the market value of debt is $300,000, the market value of preferred stock is $70,000, and the company has 100,000 shares of stock..
Why domestic markets benefit from protectionist trade policy : Why would domestic markets benefit from protectionist trade policies? Do you believe tariffs or nontariff barriers can be more effective in restricting trade? Discuss which types of restrictions would be most beneficial to industries.
What compromise on the floor of philadelphia convention : What compromise on the floor of Philadelphia convention created a bicameral Congress? a.Connecticut b. New Jersey c. Virginia
Determine the temperature in the room : Use specific heat values at room temperature, and assume the room to be at 100 kPa and 15°C in the morning when she leaves.
Which of the following internal control procedures : Which of the following internal control procedures would minimize the misuse of corporate credit cards?a) Establishing a restrictive policy regarding the issuance of the cards.b) Reviewing the continued need for each card periodically.c) Reconciling ..

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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