1. A firm's balance sheet shows $900 million in shareholder's equity and $690 million in debt....
1. A firm's balance sheet shows $900 million in shareholder's equity and $690 million in debt. The debt has an average yield to maturity of 6.7%. The firm also has $100 million in cash and short-term investments that is not required for business operations. The required return on the firm's equity is 14.0%, the current share price is $31.00, and it has 57 million shares outstanding. The corporate tax rate is 22%. What is this firm’s WACC?
a. 8.0% b. 8.7% c. 9.8% d. 10.4% e.11.8%
2.
You estimate Bayleaf Inc. has free cash flows of $70 million arriving in 1 year, $74 million in 2 years, and $80 million in 3 years. After year 3, the long term growth rate of FCF will be 3% (thus year 4 FCF is $82.4 million). Bayleaf has $241 million in net debt and a weighted average cost of capital of 14%. What is your estimate of the Enterprise Value of Bayleaf (in millions)?
a. $330 b. $441 c. $522 d. $678 e. $766 f. $825
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1. A firm's balance sheet shows $900 million in shareholder's
equity and $690 million in debt....
A firm's balance sheet shows $900 million in shareholder's equity and $690 million in debt. The...
A firm's balance sheet shows $900 million in shareholder's equity and $690 million in debt. The debt has an average yield to maturity of 6.7%. The firm also has $100 million in cash and short-term investments that is not required for business operations. The required return on the firm's equity is 14.0%, the current share price is $31.00, and it has 57 million shares outstanding. The corporate tax rate is 22%. What is this firm’s WACC? 8.0% 8.7% 9.8% 10.4%...
5. Shi Importer's balance sheet shows $300 million in debt, $50 million in preferred stock, and...
5. Shi Importer's balance sheet shows $300 million in debt, $50 million in preferred stock, and $250 million in total common equity. Shi's tax rate is 40%, Ka-6 % , Kps 5.8% and Kc, preferred stock, and 65% common stock, what is its WACC? 12%. If Shi has a target capital structure of 30% debt, 5% 6. In the spring of last year, Tempe Steel learned that the firm would need to reevaluate the company's weight average cost of capital...
The 2017 balance sheet of Kerber's Tennis Shop, Inc., showed long-term debt of $65 million, and...
The 2017 balance sheet of Kerber's Tennis Shop, Inc., showed long-term debt of $65 million, and the 2018 balance sheet showed long-term debt of $6.7 million. The 2018 income statement showed an interest expense of $230,000. During 2018, the company had a cash flow to creditors of $30,000 and the cash flow to stockholders for the year was $85,000. Suppose you also know that the firm's net capital spending for 2018 was $1,500,000, and that the firm reduced its net...
The right side of the balance sheet shows the firm's liabilities and stockholders' equity. Which of...
The right side of the balance sheet shows the firm's liabilities and stockholders' equity. Which of the following best describes shareholders' equity? Equity is the sum of what the initial stockholders paid when they bought company shares and the earnings that the company has retained over the years. Equity is the difference between the paid-in capital and retained earnings. NOW Inc. released its annual results and financial statements. Grace is reading the summary in the business pages of today's paper....
help!! 4. Corporate Valuation Model ABC Corp. just reported Free Cash Flow (FCF) of $235.69 million...
help!!
4. Corporate Valuation Model ABC Corp. just reported Free Cash Flow (FCF) of $235.69 million Managers expect that FCF will continue to grow at a constant rate of 4%. The firm also has some short-term marketable securities worth $50 million that are considered non-operating assets, so are not included in free cash flow. The firm has short-term debt in the form of notes payable of $150 million, long term debt of $500 million, and has issued preferred stock worth...
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ABC Trucking's balance sheet shows a total of noncallable $38 million long-term debt with a coupon rate of 5.60% and a yield to maturity of 8.80%. This debt currently has a market value of $55 million. The balance sheet also shows that the company has 12 million shares of common stock, and the book value of the common equity is $216.20 million. The current stock price is $20.10 per share; stockholders' required return, rs, is 14.15%; and the firm's tax...
Trevor Drinville 1) Shi Importer's balance sheet shows $300 million in debt, $200 million in preferred...
Trevor Drinville 1) Shi Importer's balance sheet shows $300 million in debt, $200 million in preferred stock, and $500 million in total common equity. The tax rate is 35%, the before tax return on debt is 8%, preferred stock costs the company 7%, and the risk-free rate of return is 6%, the average stock is expected to earn 16%, and the company's beta is 1.4. The target capital structure is 35% debt, 10% preferred stock, and 55% common equity. What...
Question 37 . 1 pts Last year, a company issued $50 million of debt that was...
Question 37 . 1 pts Last year, a company issued $50 million of debt that was entirely bought by a private investor. This debt, which was issued at par and is not traded, has a nine-year remaining life and pays 8.0 percent interest on a semiannual basis. If the company were to issue $10 million in new debt today at par value, it would have to pay a coupon of 12.0 percent. The company's equity has an estimated market value...
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Bolster Foods' (BF) balance sheet shows a total of $25 million long-term debt with a coupon rate of 8.50%. The yield to maturity on this debt is 8.00%, and the debt has a total current market value of $27 million. The balance sheet also shows that the company has 10 million shares of stock, and the stock has a book value per share of $5.00. The current stock price is $20.00 per share, and stockholders' required rate of return, rs,...
Zagrot Trucking’s balance sheet shows a total of noncallable $45 million long-term debt with a coupon rate of 8.00% and a yield to maturity of 6.00%. This debt currently has a market value of $100 mil...
Zagrot Trucking’s balance sheet shows a total of noncallable $45 million long-term debt with a coupon rate of 8.00% and a yield to maturity of 6.00%. This debt currently has a market value of $100 million. The balance sheet also shows that the company has 20 million shares of common stock, and the book value of the common equity (common stock plus retained earnings) is $650 million. The current stock price is $100 per share; stockholders' required return, rs, is...
5. Shi Importer's balance sheet shows $300 million in debt, $50 million in preferred stock, and $250 million in total common equity. Shi's tax rate is 40%, Ka-6 % , Kps 5.8% and Kc, preferred stock, and 65% common stock, what is its WACC? 12%. If Shi has a target capital structure of 30% debt, 5% 6. In the spring of last year, Tempe Steel learned that the firm would need to reevaluate the company's weight average cost of capital...
The 2017 balance sheet of Kerber's Tennis Shop, Inc., showed long-term debt of $65 million, and the 2018 balance sheet showed long-term debt of $6.7 million. The 2018 income statement showed an interest expense of $230,000. During 2018, the company had a cash flow to creditors of $30,000 and the cash flow to stockholders for the year was $85,000. Suppose you also know that the firm's net capital spending for 2018 was $1,500,000, and that the firm reduced its net...
The right side of the balance sheet shows the firm's liabilities and stockholders' equity. Which of the following best describes shareholders' equity? Equity is the sum of what the initial stockholders paid when they bought company shares and the earnings that the company has retained over the years. Equity is the difference between the paid-in capital and retained earnings. NOW Inc. released its annual results and financial statements. Grace is reading the summary in the business pages of today's paper....
help!!
4. Corporate Valuation Model ABC Corp. just reported Free Cash Flow (FCF) of $235.69 million Managers expect that FCF will continue to grow at a constant rate of 4%. The firm also has some short-term marketable securities worth $50 million that are considered non-operating assets, so are not included in free cash flow. The firm has short-term debt in the form of notes payable of $150 million, long term debt of $500 million, and has issued preferred stock worth...
Trevor Drinville 1) Shi Importer's balance sheet shows $300 million in debt, $200 million in preferred stock, and $500 million in total common equity. The tax rate is 35%, the before tax return on debt is 8%, preferred stock costs the company 7%, and the risk-free rate of return is 6%, the average stock is expected to earn 16%, and the company's beta is 1.4. The target capital structure is 35% debt, 10% preferred stock, and 55% common equity. What...
Question 37 . 1 pts Last year, a company issued $50 million of debt that was entirely bought by a private investor. This debt, which was issued at par and is not traded, has a nine-year remaining life and pays 8.0 percent interest on a semiannual basis. If the company were to issue $10 million in new debt today at par value, it would have to pay a coupon of 12.0 percent. The company's equity has an estimated market value...
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