WACC Formula = (E/V * Ke) + (D/V) * Kd * (1 – Tax rate)
QUESTION-1 (15+ 15- 30 marks) Beta Ltd operates a quite successful chain of milk products and...
QUESTION-1 (15+ 15- 30 marks) Beta Ltd operates a quite successful chain of milk products and tea houses across South East Asia, Beta plans to expand in South America. Therefore, Beta needs some funds for this investment. The company balance sheet in Australian Dollars(AS) is as follows Cash Accounts receivable Inventories Net fixed assets Total assets 1,500,000 2,400,000 1.310,000 Long-term debt 2,500 000 Common Equity 4,000,000 3,710,000 1710,000 Total Debt and Equity7.710,000 Nowadays the company's common equity is selling for...
Crawford Enterprises is a publicly held company located in Arnold, Kansas. The firm began as a small tool and die shop but grew over its 35-year life to become a leading supplier of metal fabrication equipment used in the farm tractor industry. At the close of 2015, the firm's balance sheet appeared as follows: Cash $420,000 Accounts receivable 5,350,000 Inventories 8,100,000 Long-term debt $12,570,000 Net property, plant, and equipment 18,128,000 Common equity 19,428,000 Total assets $31,998,000 Total debt and equity...
(Weighted average cost of capital) Crawford Enterprises is a publicly held company located in Arnold, Kansas. The firm began as a small tool and die shop but grew over its 35-year life to become a leading supplier of metal fabrication equipment used in the farm tractor industry. At the close of 2019, the firm's balance sheet appeared as follows: Cash 460,000 Accounts receivable 3,910,000 Inventories 8,200,000 Long-term debt 11,270,000 Net property, plant, and equipment 17,715,000 Common equity 19,015,000...
Examine the following book-value balance sheet for University Products Inc. The preferred stock currently sells for $30 per share and pays a dividend of $3 a share. The common stock sells for $20 per share and has a beta of 0.8. There are 1 million common shares outstanding. The market risk premium is 12%, the risk-free rate is 8%, and the firm's tax rate is 40% BOOK-VALUE BALANCE SHEET (Figures in $ millions) Liabilities and Net Worth Assets Bonds, coupon...
6. Look at the information below. This table refers to Candy Enterprises. Currently common stock is being sold at for a price equal to its book value and the firm's bonds are selling at par. Crawford managers estimate that the market requires a 15 percent return on its common stock, the firm's command a yield to maturity of 8 percent, and the firm faces a tax rate at 34 percent. Cash Accounts Receivable $54,000 458,000 Inventories Net Property, Plant &...
Crawford Enterprises is a publicly held company located in Arnold, Kansas. The firm began as a small tool and die shop but grew over its 35 year life to become a leading supplier of metal fabrication equipment used in the farm tractor industry. At the close of 2019 the firm's balance sheet appeared as follows: Cash $540,000 Accounts Receivable 4,580,000 Inventories 7,400,000 Long-term debt $12,590,000 Net Property, plant and equipment 18,955,000 Common equity 18,885,000 Total Assets $31,475,000 Total debt and...
Saved Help Examine the following book-value balance sheet for University Products Inc. The preferred stock currently sells for $30 per share and pays a dividend of $3 a share. The common stock sells for $20 per share and has a beta of 0.8. There are 2 million common shares outstanding. The market risk premium is 8% , the risk-free rate is 4%, and the firm's tax rate is 40%. BOOK-VALUE BALANCE SHEET (Figures in $ millions) Liabilities and Net Worth...
please answer part a and b of the question attached
below
Examine the following book-value balance sheet for University Products Inc. The preferred stock currently sells for $30 per share and pays a dividend of $3 a share. The common stock sells for $16 per share and has a beta of 0.9. There are 2 million common shares outstanding. The market risk premium is 9%, the risk-free rate is 5%, and the firm's tax rate is 40% BOOK-VALUE BALANCE SHEET...
Question 2 (22 marks) Halo Ltd is attempting to measure the riskiness of two projects which have the following cash flows in different states of the economy. Project Project Probability State NS 000 2 3 N$ 000 950 850 450 350 250 N$ 000 950 550 450 350 150 5 Required: a) Establish, using the standard deviation of cash flows as a measure of risk, which project is riskier. (16 marks) b) Calculate the co-efficient of variation of cash flows...
Examine the following book-value balance sheet for University Products Inc. The preferred stock currently sells for $15 per share and pays a dividend of $3 a share. The common stock sells for $20 per share and has a beta of 0.8. There are 1 million common shares outstanding. The market risk premium is 12%, the risk-free rate is 8%, and the firm's tax rate is 21%. Assets Cash and short-term securities $ 2.0 Accounts receivable 5.0 Inventories 9.0 Plant and...