Please help me this question 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.?

To calculate the enterprise value (EV) of Correct Inc., we use the following formula: EV = Market…

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

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← Unida Systems has 35 million shares outstanding trading for $12 per share. In addition, Unida has $95 million in outstanding debt. Suppose Unida's equity cost of capital is 16%, its debt cost of capital is 8%, and the corporate tax rate is 38%. a. What is Unida's unlevered cost of capital? b. What is Unida's after-tax debt cost of capital? c. What is Unida's weighted average cost of capital? a. What is Unida's unlevered cost of capital? Unida's unlevered cost of capital is%. (Round to two decimal places.)
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.
4
Unida Systems has 46 million shares outstanding trading for $12 per share. In addition, Unida has $85 million in outstanding debt. Suppose Unida's equity cost of capital is 13%, its debt cost of capital is 8%, and the corporate tax rate is 28%. a. What is Unida's unlevered cost of capital? b. What is Unida's after-tax debt cost of capital? c. What is Unida's weighted average cost of capital? a. What is Unida's unlevered cost of capital? Unida's unlevered cost of capital is %. (Round to two decimal places.)
11
Unida Systems has 35 million shares outstanding trading for $11 per share. In addition, Unida has $87 million in outstanding debt. Suppose Unida's equity cost of capital is 14%, its debt cost of capital is 7%, and the corporate tax rate is 40%. a. What is Unida's unlevered cost of capital? b. What is Unida's after-tax debt cost of capital? c. What is Unida's weighted average cost of capital? a. What is Unida's unlevered cost of capital? Unida's unlevered cost of capital is 12.7%. (Round to one decimal place.) b. What is Unida's after-tax debt cost of capital? Unida's after-tax debt cost of capital is 4.2%. (Round to one decimal place.) c. What is Unida's weighted average cost of capital? Unida's weighted average cost of capital is %. (Round to one decimal place.)
Unida Systems has 34 million shares outstanding trading for $8 per share. In addition, Unida has $94 million in outstanding debt. Suppose Unida's equity cost of capital is 14%, its debt cost of capital is 9%, and the corporate tax rate is 40%. a. What is Unida's unlevered cost of capital? b. What is Unida's after-tax debt cost of capital? c. What is Unida's weighted average cost of capital?
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?
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