What will be the value of the company

Assignment Help Finance Basics
Reference no: EM13272035

Assume another company had the following information related to the free cash flows to equity holders in amount of $1.5 million a year from now and also growing at the same rates as given above. The cost of equity is 12%. What will be the value of equity of the firm? What will be the value of the company if it has a debt of $7.5 million?

Reference no: EM13272035

Questions Cloud

Explain how many grams of n2are produced in the detonation : If each mole of gas occupies 59 L under the conditions of the explosion, how many liters of gas are produced. Express your answer using two significant figures. How many grams OF N2are produced in the detonation
What is the sharpe ratio : A portfolio has a beta of 1.23 and a standard deviation of 11.6 percent. What is the Sharpe ratio if the market return is 12.4 percent and the market risk premium is 7.9 percent?
How many excess electrons does it have : A spherical water drop 2.4 µm in diameter is suspended in calm air due to a downward-directed atmospheric electric field of magnitude E = 3696 N/C.
Write the translated form of e in rectangular components : The vector field E=(B/p)ap where B is a constant,is translated such that it originates at the line ,x=2,y=0.Write the translated form of E in rectangular components
What will be the value of the company : The cost of equity is 12%. What will be the value of equity of the firm? What will be the value of the company if it has a debt of $7.5 million?
Determine a unit vector directed from q toward p : A vector field is specified as G=24xyax +12(x^2+2)ay+18z^2az.Given two points ,P(1,2,-1) and Q(-2,1,3),find :(a) G at P ;(b) a unit vector in the direction of G at Q ;(c)a unit vector directed from Q toqard P
The fuel used in many disposable lighters is liquid butane : The fuel used in many disposable lighters is liquid butane, C4H10.How many carbon atoms are in 2.00 g of buta? Express numerically in atoms
Explain either the causes or the effects of a situation : Narrow your topic enough to treat it in some detail, and provide-More than a mere list of causes or effects. If you are seeking causes, you will have to decide carefully how far back to go in your search for remote causes.
Determine what is the value with x not equal to 0 : 3)what is its frequency content 4) The 1D rect function has a width of 1; i.e. has a non-zero value between +1/2 and -1/2. What is the width of the delta function 5) What is the area of the delta function

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate the npv of each choice

The opportunity cost of capital is 10.3 percent. Calculate the NPV of each choice and suggest when should Predator sell the company?

  Real rate of return-expected nominal interest rate

Suppose investors expect the 2.0 percent real rate of return over the next year. If inflation is expected to be 0.5 percent, find out the expected nominal interest rate for a one-year U.S. Treasury security?

  Information about initial public offerings

Your work for this module is to apply the concept of the present value to your chosen SLP company. Assume your company is selling the bond that will pay you $1000 in one year from today.

  What was its depreciation and amortization expense

Sosa Corporation recently reported an EBITDA of $31.9 million and net income of $9.7 million. The company had $6.8 million in interest expense, and its corporate tax rate was 35 percent. What was its depreciation and amortization expense?

  Computation of number of shares to be used for requirement

Computation of number of shares to be used for required amount of requirement and How much will McDougal Entertainment receive from this stock offering

  Making profit by arbitrage opportunity

Suppose that the current spot exchange rate is USD/SKR6.25 and the three-month forward exchange rate is USD/SKR6.28. The three-month interest rate is 5.6% per annum in the U.S. and 8.8% per annum in Sweden.

  Computation of break even volume of service revenue

Computation of Break even volume of service revenue - Find the revenue must the firm generate to earn an after-tax net income of $100,000? and consider the firm's income tax rate rises to 40 percent. What will happen to the break-even level of consul..

  Calculate break even and current eps

Romeo & Juliette are competitors in selling college finance textbooks. The separate capital structures of each corporation are as follows:

  Why is the dividend yield unaffected

Rate of Return: Return to quiz question 1. Suppose the year-end stock price after the dividend is paid is $36. What are the dividend yield and percentage capital gain in this case? Why is the dividend yield unaffected?

  Future growth

You are an analyst in charge of valuing common stocks. You are expected to give a buy-hold-sell recommendation for DEF, a pharmaceutical company specializing in anti-inflammatory drugs. Observing the current market trends, you expect future growth in..

  What is the conversion price pc

Convertible debentures for Kulik Corp. were issued at their $1,000 par value in 2012. At any time prior to maturity on February 1, 2032, a debenture holder can exchange a bond for 25 shares of common stock.

  Construct an extended du pont equation

The Fern Furniture Corporation, a manufacturer and wholesaler of high-quality home furnishings, has been experiencing low profitability in recent years.

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