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Get college assignment help at uniessay writers Pompeii Pizza Club owns three identical restaurants popular for their specialty pizzas. Each restaurant has a debt-equity ratio of 30 percent and makes interest payments of $60,000 at the end of each year. The cost of the firm’s levered equity is 17 percent. Each store estimates that annual sales will be $1.545 million; annual cost of goods sold will be $835,000; and annual general and administrative costs will be $495,000. These cash flows are expected to remain the same forever. The corporate tax rate is 23 percent. a. Use the flow to equity approach to determine the value of the company’s equity. (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89) b. What is the total value of the company? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89) Value of the company’s equity a. Value of the company b.

al Exam ed: Jun 13 at 4:18am iz Instructions ow Instructions Question 11 5 pts Your financial firm needs to borrow $ 200 million by selling time deposits with 270 day maturities. If interest rates on comparable deposits are currently at 2.5% , what is the cost of issuing these deposits? Suppose interest rates decline to 2 %. What then will be the cost of these deposits? What position and type of hedge could be used to deal with this cost change? O 5m, 4m, long hedge O 3.75m, 3m, short hedge 3.75m, 3m, long hedge 4m, 5m, cds swap app.honorlock.com is shanng your screen Stop sharing Hide Next a

C3: Your old machine has finally lost its productive usefulness. You are considering two potential new machines for replacement. Machine M will last for 4 years and will require annual operating costs of $480,000 per year. Machine N will last for 7 years and will require annual operating costs of $200,000. The initial costs of Machines M and N are $2,600,000 and $3,000,000, respectively. Assume an appropriate risk-adjusted discount rate of 9 percent. ISK1: 10 marks Reqaired: a. Calculate the cost of each machine in NPV terms. (4 marks) b. Calculate the equivalent annual cost (EAC) for each machine. (4 marks) c. Which machine will be cheapest for the company to use? (2 marks)

Spring: 2018-2019 Incomplete Examination C2: Evaluate the following projects, using the profitability index. Assume a cost of capital of 10% RC1: 5 marks Project N -$100,000 64,000 38,000 30,000 Project M -$104,000 9,200 50,800 76,000 Initial Cash Outflow Year 1 Cash flow Year 2 Cash flow Year 3 Cash flow What is the profitability index for each project? (3 marks) b. a. If projects M

Section C (20 Marks) an after-tax cost of debt C1: Green Ltd. has $50 million in debt, equity of $100 million, of 7 percent, a cost of equity of 10 percent, and a tax rate of 25 percent. [SD1: 5 marks] Required: Calculate the firm’s weighted average cost of capital (WACC).

1 What is the correct formula for Goodwill? Book value of target’s equity Adjustments Price paid – fair market value of net identifiable assets of target Market value of acquirer – fair market value of target Market value of acquirer -net identifiable assets of target

mdut demand Eor the crmnt tou bathina s staff Temps can be hired when needed and can te used as needed on a month-y mceh hasis whereas the full timeemokvees must be neid whether they are needed ec oot Fach ful time emolovee Demand tor batna suts for the next four manths Is as folows an nroduce 201 suts, whie each temcocary emokvee.can nroduce 161 suits nec menth AUGUST- 3035 JUNE 83 MAY JULY 134 3.238 top and bottom) bathing suits. Bathing suits cost $40 to produce and camying cost is 24 percent per year Beginring inventory in May s 405 complete (a complete two-piece includes bot Deveinp an aggrngate plan that uses the 12 full-time employees cach manth and a minimum number af tempnrary emplnyees Assume that all empknyees menth levels. (Round “inventory cost” to 2 decimal places. produce at ther full patential each month Caculate the inventory carrying cost associated with your plan using planned end of May August 3.035 Jun July 283 3235 13 i ria iventory Producton required Roadar aroduction Tamp workfoce Temp prodclion Total production Inventory cost

Problem 9-10 In the follcwng MRP planning schedule for Item J, Indicate the comect net requirements, planned arder recepts and plannod arder relcases to meet the gross roquirements. Lead time is one weck (Leave no calls blank -ba certain to antar “0 wharever required.) WEEK NUMBER TEM J requiroments N der reepict Flanned arder release Darinn Gross requirements d wreiletle balece hem J Net requirements Hnd crder rnieases. Reterances Book

$26.00 ABC Co. Stock Price $10.00 XYZ Co. Stock Price $2,000,000 ABC Co. Cash $1,500,000 XYZ Co. Cash ABC Co. Shares Outstanding 300,000 XYZ Co. Shares Outstanding 150,000 ABC Co. is considering an acquisition of XYZ Co. for a cash offer that values XYZ at 20% higher than its current market capitalization. Given the above data, calculate the takeover premium in dollar terms (Round to the closest dollar). $250,000 $300,000 $315,000 $400,000

SCF financial definition of SCF http://financial dietie ed e C Tereey Suppler Spp Component Supplers Cp Supers Materal Degree of Eplot Coordnaton Degree of Power Asyeetry Low Source: Gereffi et al (2005), 89 Question 1. (See Figure 5.2) You are a management consultant with expertise in leveraging global value chains for developing small and medium enterprises (SMES). An SME has con- tacted you for advice about how they can escape being a ‘captive supplier’ and become a ‘turn-key supplier’. What is the gist of your advice?

Get college assignment help at uniessay writers c) What is a Repurchase Agreement operations of security dealers. or RP? Explain what an RP’s role is in financing the d) (i) When were CDs first offered in the money market? By what financial institution? Why were these instruments developed? (ii) Who are the principal BORROWERS active in the federal funds market? Why are they attracted to this market for the funds they require? Please explain the meaning of the term FINNANCIAL INNOVATION. How about DEREGULATON? SERVICE PROLI FERATION?

Shares outstanding 150,000 Cash 120,000 Tax Rate 6% 2% Discount Rate Enterprise Value 300,000 90,000 Debt Perpetual Growth Rate 5% Given the data in the above table, calculate equity value per share of this hypothetical company. (Round to 2 decimal points) $2.20 $3.00 $2.00 $2.50

Stub 2 Online Company Inc Model 3 Balance Sheet Check 4 End of Period 5 Days in Perlod 6 Fraction of Year 2016 2017 2018 531/2017 ok ok ok 531/2017 214 ok 12/31/2016 12/31/2017 12/31/2018 365 1.000 365 366 1.000 0.590 1,000

Gunnar Corp. current market value of the equity is $46 million and the corporate tax rate is 24 percent. uses no debt. The weighted average cost of capital is 8.8 percent. The What is the EBIT? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) |ЕBIT

Weston Industries has a debt-equity ratio of 1.6. Its WACC is 7.8 percent, and its cost of debt is 5.5 percent. The corporate tax rate is 21 percent. What is the company’s cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places e.g., 32.16.) b. What is the company’s unlevered cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-1. What would the cost of equity be if the debt-equity ratio were 2? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-2. What would the cost of equity be if the debt-equity ratio were 1.0? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-3. What would the cost of equity be if the debt-equity ratio were zero? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) а. % Cost of equity а. Unlevered cost of equity b. % % c-1 Cost of equity C-2. Cost of equity C-3. Cost of equity % %

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Dickson, Inc., has a debt-equity ratio of 2. The firm’s weighted average cost of capital is 10 percent and its pretax cost of debt is 7 percent. The tax rate is 22 percent. a. What is the company’s cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g. 32.16.) b. What is the company’s unlevered cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g. 32.16.) c. What would the company’s weighted average cost of capital be if the company’s debt equity ratio were 50 and 1.00? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Cost of equity % a. Unlevered cost of equity % WACC if debt-equity ratio 0.50 % C. WACC if debt-equity ratio 1.00 26

Morrow Corp. has an EBIT of $835,000 per year that is expected to continue in perpetuity. The unlevered cost of equity for the company is 16 percent and the corporate tax rate is 21 percent. The company also has a perpetual bond issue outstanding with a market value of $21 million What is the value of the company? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g. 1,234,567.89) Value of the company The CFO of the company informs the company president that the value of the company is $3.8 million. Is the CFO correct? Is the CFO correct?

Charisma, Inc., has debt outstanding with a face value of $6.5 million. The value of the firm if it were entirely financed by equity would be $32.4 million. The company also has 440,000 shares of stock outstanding that sell at a price of $61 per share. The corporate tax rate is 25 percent. What is the decrease in the value of the company due to expected bankruptcy costs? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g. 1,234,567.) Financial distress costs

Steinberg Corporation and Dietrich Corporation are identical firms except that Dietrich is more levered. Both companies will remain in business for one more year. The companies’ economists agree that the probability of the continuation of the current expansion is 70 percent for the next year and the probability of a recession is 30 percent. If the expansion continues, each firm will generate earnings before interest and taxes (EBIT) of $4.6 million. If a recession occurs, each firm will generate earnings before interest and taxes (EBIT) of $1.4 million. Steinberg’s debt obligation requires the firm to pay $1,000,000 at the end of the year. Dietrich’s debt obligation requires the firm to pay $1.5 million at the end of the year. Neither firm pays taxes. Assume a discount rate of 12 percent. a-1.What is the value today of Steinberg’s debt and equity? (Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.) What is the value today of Dietrich’s debt and equity? (Do not round intermediate 2. calculations and enter your answers in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.) b. Steinberg’s CEO recently stated that Steinberg’s value should be higher than Dietrich’s because the firm has less debt and therefore less bankruptcy risk. Do you agree or disagree with this statement? a- a-1. Steinberg equity value Steinberg debt value a-2. Dietrich equity value Dietrich debt value b. Risk of bankruptcy affect a firm’s value

Good Time Company is a regional chain department store. It will remain in business for one more year. The probability of a boom year is 60 percent and the probability of a recession is 40 percent. It is projected that the company will generate a total cash flow of $203 million in a boom year and $94 million in a recession. The company’s required debt payment at the end of the year is $128 million. The market value of the company’s outstanding debt is $101 million. The company pays no taxes. a. What payoff do bondholders expect to receive in the event of a recession? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) b. What is the promised return on the company’s debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g. 32.16.) c. What is the expected return on the company’s debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Payoff b. Promised return Expected return a. % C.

The post Question: Pompeii Pizza Club Owns Three Identical Restaurants Popular For Their Specialty Pizzas. Each Restaurant Has A Debt-equity Ratio Of 30 Percent And Makes Interest Payments Of $60,000 At The End Of Each Year. The Cost Of The Firm’s Levered Equity Is 17 Percent. Each Store Estimates That Annual Sales Will Be $1.545 Million; Annual Cost Of Goods Sold Will … appeared first on uniessay writers.

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November 3, 2019