Accounts Payable Notes Payable Long Term Debt Common Stock Retained Earnings Total Liabilities & Equity $ 275,000 $ 315,000 $ 495,000 $925,000 $2,450,000 $4,460,000 Pre-Tax Cost of Debt: Intermediate Debt: 4.5% Long Term Debt: 6.5% Tax Rate: 21% Return on Equity: 11% Dividends per share: $0.20 Earnings per share: $0.90 C/S market price: $55 C/S outstanding: 80000 shares This company uses intermediate debt, long-term debt and common equity to finance its operations. With the information presented above: a. Calculate the firm's debt ratio (book value and market value based) b. Calculate the firm's WACC c. Calculate the new firm's WACC if the firm issued 150,000 new common stock at a flotation cost of $1.20 per share. The new issuance generates $4.5 million.

Accounts Payable Notes Payable Long Term Debt Common Stock Retained Earnings Total Liabilities & Equity $ 275,000 $ 315,000 $ 495,000 $925,000 $2,450,000 $4,460,000 Pre-Tax Cost of Debt: Intermediate Debt: 4.5% Long Term Debt: 6.5% Tax Rate: 21% Return on Equity: 11% Dividends per share: $0.20 Earnings per share: $0.90 C/S market price: $55 C/S outstanding: 80000 shares This company uses intermediate debt, long-term debt and common equity to finance its operations. With the information presented above: a. Calculate the firm's debt ratio (book value and market value based) b. Calculate the firm's WACC c. Calculate the new firm's WACC if the firm issued 150,000 new common stock at a flotation cost of $1.20 per share. The new issuance generates $4.5 million.

Name: Accounts PayableNotes PayableLong Term DebtCommon StockRetained Earni
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Description: Accounts PayableNotes PayableLong Term DebtCommon StockRetained EarningsTotal Liabilities &Equity$ 275,000$ 315,000$ 495,000$ 925,000$2,450,000$4,460,000Pre-Tax Cost of Debt:Intermediate Debt: 4.5%Long Term Debt: 6.5%Tax Rate: 21%Return on Equity: 1

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Wildwood, Inc. reports net income of $160,000, net sales of $380,000, average total assets of $940,000 and average total liabilities of $450,000. Calculate return on equity. a. 17.0% b. 32.7% c. 35.6% d. 77.6%
Atlanta Company $ 820,000 490,000 Atlanta Company Spokane Company Total liabilities Total equity Compute the debt-to-equity ratio for each of the above companies. Choose Numerator: 100 Atlanta Company Spokane Company Spokane Company $ 298,900 1,786,000 Debt to equity ratio / Choose Denominator: mation Which company appears to have a riskier financing structure? Prev 4 of 5 = Debt-to-equity ratio II MacBook Air Next >
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Nos. 8 to following financial information: Baron Family, Inc. for the last 12 months has the Balance Sheet Total Liabilities - Php 9,000,000.00 Income Statement Sales - Php 20,000,000.00 Gross Profit - Php 5,000,000.00 OPEX - Php 2,000,000.00 Financial Ratios Debt to Equity Ratio - 3:1 Dividend Yield Ratio - 10% Dividend Pay-out Ratio - 0.20:1 Baron Family, Inc. is planning to sell 20% of its business and would like to calculate the value of its business using various valuation methods. 8. How much is the value of 20% of the business using Book Value Method? a. Php,800,000.00 b. Php 9,000,000.00 c. Php 600,000.00 d. Php 3,000,000.00 9. How much is the value of 20% of the business using Dividend Paying Capacity? a. Php 6,000,000.00 b. Php 1,200,000.00 c. Php 600,000.00 d. Php 900,000.00 10. How much is the value of 20% of the business using Multiples of Eaming Valuation Method assuming appropriate multiplier of 1.5? a. Php 4,500,000.00 b. Php 1,200,000.00 c. Php 600,000.00 d. Php…
Knowledge Check 01 Total Assets for a company are $700,000: Accounts Payable is $75,000, Bonds Payable is $225,000; Common Stock is $300,000 and Retained Earnings is $100,000. The common-size percent for Accounts Payable is 0933% 0933.3% - 10.7% - 100.7%
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