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!
Butthole Industries is buying out Avengers, Inc. Butthole and Avengers both have market capitalizations equal to their fair value or the present value of their net cash flows. Butthole generates $45M per year in net cash flows but has no growth. Avengers is expected to generate $25M in net cash flows next year. Also, grow at 15% per year after. The return on capital of both companies over the past years:
Return on Capital
Butthole
Avengers
Year 1
-20.5%
45.8%
Year 2
41.1%
-5.8%
Year 3
10.5%
20.9%
Note that the relevant discount rate for each firm is the "average" return on capital.
A. If past history is a good indicator of future performance, what are the expected return on capital and standard deviation of return on capital for the merged entity?
B. In which of the two major dimensions this merger could possibly help Butthole: boosting the return or reducing the risk? Prove your point quantitatively.
How has the Internet revolution affected the workings of businesses, consumers, and government in a free market economy? Specifically, how has Internet affected businesses' ability
What are cost and revenue relationships?
There are 4 main types of market economies. They are also called as Economic Systems. The four are Free Market, Mixed Market, Traditional and Command Economy
The primary functions of economists are to teach, contribute research and empirical findings and formulate policies. Most of the professional economists are associated with academi
benefit of GDP
Illustrate the aspect depends onto producers and consumers surplus. a. How much advantage do producers and consumers receive by the existence of a market? b. How is the welf
For retirement planning, you decided to deposit $1,000 per month and increase your deposit by $100 per month. How much will you have at the end of 10 years if the bank pays 3% annu
Use the following general linear demand relation: Qd = 680 - 9P + 0.006M - 4PR where M is income and PR is the price of a related good, R. If M = $15,000 and PR = $20 and the suppl
Consider an economy that produces only three types of fruit: apples, oranges & bananas. In the base year the production & price data are as follows: Fruit
The problem with the Keynesian model We can classify two problems with the Keynesian model as developed so far: 1. Π is exogenous. Although inflation may temporarily deviate
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: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd