ABC is an all-equity firm that has 44,200 shares of stock outstanding at a market price of $14.70 per share. The firm is considering a capital structure with 53% debt at a rate of 5% and use the proceeds to repurchase shares. Determine the shares outstanding once the debt is issued. Hiiii tutor give me Answer
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ABC is an all-equity firm that has 44,200 shares of stock outstanding at a market price of $14.70 per share. The firm is considering a capital structure with 53% debt at a rate of 5% and use the proceeds to repurchase shares. Determine the shares outstanding once the debt is issued. Hiiii tutor give me Answer
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- Answer this questionDetermine the shares outstanding once the debt is issuedA company has the following balance sheet (market values): Liabilities + Equity Debt Equity Assets Cash Operating Assets 600 1000 400 1200 If the firm has 110. find the # of outstanding shares remaining after it repurchases 120 worth of shares: (round your answer to the nearest 0.01)
- General AccountingNeed answer the financial accounting questionYou are an investment adviser. One of your clients approaches you for your advice on investing inequity shares of Theta Company. You have collected the following data:Earnings per share last year $6.00Payout ratio 0.40Return on equity 0.30Cost of equity capital 0.20The company plans to increase the payout ratio to 60% from year 5.Required:i) Estimate the price of an equity share of this company using an appropriate dividenddiscount model and advise your client whether they should buy a share of the company.ii) Your client is keen to know whether there are any growth opportunities from theirinvestment. Explain to your client the meaning of this concept using appropriatecalculations.iii) If there are positive or negative growth opportunities, explain the reason for suchopportunities.
- NO WRONG ANSWERProvide correct answer general accountingYou are an investment adviser. One of your clients approaches you for your advice on investing in equity sharesof Alpha Company. You have collected the following data:Earnings per share last year $5.00Payout ratio 0.30Return on equity 0.30Cost of equity capital 0.25The company plans to increase the payout ratio to 40% from year 6.Required:i) Estimate the price of an equity share of this company using an appropriate dividend discount modeland advise your client whether they should buy a share of the company.ii) Your client is keen to know whether there are any positive growth opportunities from theirinvestment. Explain to your client the meaning of this concept using appropriate calculations.
- Cross Town Cookies is an all-equity firm with a total market value of $695,000. The firm has 46,000 shares of stock outstanding. Management is considering issuing $146,000 of debt at an interest rate of 8 percent and using the proceeds to repurchase shares. Before the debt issue, EBIT will be $60,800. What is the EPS if the debt is issued? Ignore taxes. Multiple Choice $1.46 $.98 $1.20 $1.35explain 7. An investor owns 500 shares of stock in a firm with a debt/equity ratio = 1.0. The investor prefers an all-equity firm. If the stock price is $2 per share, what should the investor do? A. Sell 25 shares and lend $50. B. Sell 250 shares and lend $500. C. Borrow $500 and buy 250 new shares. D. Borrow $1,500 and buy 750 new shares. E. Borrow $2,500 and buy 1,250 new shares.Suppose that you just short sold 100 shares of Quiet Minds stock for $86.00 per share. Required: a. If the initial margin requirement is 60%, how much equity must you invest?