Please help me this question general accounting 77 Correct Inc. is a publicly traded firm, with 100 milliondiluted shares outstanding, trading at $37.50 per share.The company has $1 billion of debt outstanding, with acost of debt at 6.5%, at a marginal tax rate of 40%. Thecompany has $100 million of cash on its balance sheet.What is the enterprise value of Correct Inc.?

Step 1: Information givenNumber of shares outstanding = 100 millionMarket price per share =…

Answered: 77 Correct Inc. is a publicly traded…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 13P

See similar textbooks

Similar questions

Please help me this question
How do I go about solving this?
19
Harper Industries has $900 million of common equity on its balance sheet, its stockprice is $80 per share, and its market value added (MVA) is $50 million. How many commonshares are currently outstanding?
20) Suppose Logan Inc. has earnings per share of $3.45 and EBITDA of $45 million. Logan Inc. also has 5 million shares outstanding and debt of $150 million (net of cash). You believe that John Logistics and Transport (JLT) is comparable to Logan Inc. in terms of its underlying business, but JLT has no debt. JLT has a P/E of 12.5 and an enterprise value to EBITDA multiple of 7. Based upon the enterprise value to EBITDA ratio, the value of a share of Logan Inc. is closest to: a) $33.00. b) $82.50. c) $43.10. d) $21.25.
11
A firm has 41 million shares outstanding with a current share price of $4.30 The firm has a market-to-book ratio of 8.5 and a book debt-equity ratio of 2.2. If the firm currently has $18 million in cash, what is its enterprise value?
Based on the corporate valuation model, the total corporate value of Chen Lin Inc. is $1,275 million. Its balance sheet shows $280 million in notes payable, $230 million in long-term debt, $50 million in preferred stock, $140 million in retained earnings, and $280 million in total common equity. If the company has 10 million shares of stock outstanding, what is the best estimate of its stock price per share? a. $57.50 b. $65.00 c. $76.50 d. $71.50 e. $99.50
Kms corporation has...accounting question
17.1. Firm Value Morrow Corp. has EBIT of $775,000 per year that is expected to continue in perpetuity. The unlevered cost of equity for the company is 12 percent and the corporate tax rate is 24 percent. The company also has a perpetual bond issue outstanding with a market value of $1.8 million. What is the value of the company? The CFO of the company informs the company president that the value of the company is $4.6 million. Is the CFO correct?
A company has a current value of operations of $800 million,and it holds $100 million in short-term investments. If thecompany has $400 million in debt and has 10 million commonshares outstanding, what is the estimated price per share?($50.00
Based on the corporate valuation model, Morgan Inc.'s total corporate value is $200 million. The balance sheet shows $90 million of notes payable, $30 million of long term debt, $40 million of preferred stock, and $100 million of common equity. The company has so million shares of stock outstanding. What is the best estimate of the stock's price per share? 1388 OD 14.12 O c $336 Od 380 O 14.00

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SEE MORE TEXTBOOKS