11. Heinz Inc expects to generate earnings over the next five years of Php 50,000.003; Php 60,000.00; Php 65,000.00;Php 70,000.00; and Php 75,000.00. Using the Capitalization of Earnings Method, what is the estimated value ofthe firm using 8.00% required rate of return.a) Php 600,000.00b) Php 800,000.00c) Php 500,000.00d) Php 700,000.0012. Ernesto, Inc has projected average earnings every year of Php 100,000,000. Debt to Equity Ratio is 3:1 After taxcost of debt is 5% while the cost of equity is 10%. The Board of Directors of the company decided to sell thecompany for 1,000,000,000 computes for the Economic Value Added (EVA).a) Php 37,500,000.00b) Php 50,000,000.00c) Php 0d) Php 25,000,000.00

Value of the firm can be calculated by using capitalisation earning method. For this we need to use…

11. Heinz Inc expects to generate earnings over the next five years of Php 50,000.00; Php 60,000.00; Php Php 70,000.00; and Php 75,000.00. Using the Capitalization of Earnings Method, what is the estimated value of the firm using 8.00% required rate of return. a) Php 600,000.00 b) Php 800,000.00 c) Php 500,000.00 d) Php 700,000.00

11. Heinz Inc expects to generate earnings over the next five years of Php 50,000.00; Php 60,000.00; Php Php 70,000.00; and Php 75,000.00. Using the Capitalization of Earnings Method, what is the estimated value of the firm using 8.00% required rate of return. a) Php 600,000.00 b) Php 800,000.00 c) Php 500,000.00 d) Php 700,000.00

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter13: Capital Structure Concepts

Section: Chapter Questions

Problem 6P

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