Charleston Mills is an all-equity firm with a total market value of $221,000. The firm has 8,000 shares of stock outstanding. Management is considering issuing $50,000 of debt at an interest rate of 7 percent and using the proceeds on a stock repurchase. Ignore taxes. How many shares can the firm repurchase if it issues the debt securities?
Q: Ans
A: Cash balance, November 30 = Cash balance, November 1 + Cash receipts - Cash paymentsCash balance,…
Q: Need answer please
A: Explanation of Market Capitalization Rate (r): The market capitalization rate, or required rate of…
Q: Need Answer
A: Step 1: Definition of Net Income/Loss:Net income or loss is an important line item on the income…
Q: Fill in the Blank Question All markets that have downward-sloping demand curves and upward-sloping…
A: All markets that have downward-sloping demand curves and upward-sloping supply curves yield consumer…
Q: To produce power a sugar mill burns 75kt of bagasse per year derived from 250kt of sugar cane input.…
A: The updated charts illustrate:1. Short-Run Average Abatement Cost Histogram:This histogram shows the…
Q: Need answer please
A: Step 1: Given Value for Calculation Compound = Monthly = 12 Time = t = 4 * 12 = 48Present Value = pv…
Q: 2:36 PM Tue Sep 10 Done< Business Course AA Return to course Course Content / Chapter 3 Chapter 3…
A: The correct answer is (c): Liabilities will be understated, and Stockholders' Equity and Income from…
Q: What is the effective cost of borrowing?
A: Step 1: Given Value for Calculation Average Collection Period = acp = 22 daysDiscount Rate = r =…
Q: On 1st January 2021 a business purchased a laser printer costing K250, 000. It is estimated that the…
A: Part (i): Computation of annual depreciation for the years 2021, 2022, and 2023 by using the…
Q: ???
A: First Question: ROA CalculationGiven data: Corporation's assets = 5 times the owner's equity.Real…
Q: ??
A: Steps for WACC Calculation for Galaxy Enterprises: Step 1: Identify the given values:• Market value…
Q: Don't use Ai
A: To maximize YBU's contribution to Maggy's 401(k) account, let's break down the details: Plan…
Q: Provide answer
A: To find Bravo Company's net income at a 20% debt level.Given:- Earnings before interest and taxes…
Q: Need answer the question
A: Step 1: Define Stockholders' EquityThe account of stockholders' equity is the value of a business…
Q: Solve this question
A: Step 1:Predetermined overhead rate is a single overhead rate used to allocate overhead to respective…
Q: What is the amount of the gross profit?
A: Step 1: Define Cash and Credit SalesCash sales refer to the sale of merchandise to customers in…
Q: Don't want AI generated answer
A: Question: 1Explanation of Book Value of Owner's Equity (E):The owner's equity represents the value…
Q: If you give me wrong answer, I will give you unhelpful rate
A: Question Overview:We need to calculate **Steller Corp.'s total asset turnover** using the provided…
Q: not use ai please
A: Step 1: To record the transactions for the Panther Detective Agency, we'll follow the principles of…
Q: The primary reason the annual report is important in finance is that it is used by investors when…
A: An annual report is a comprehensive report on a company's activities throughout the preceding year.…
Q: What is keys' profit margin?
A: Step 1: Define Profit MarginProfit margin is a common financial ratio to assess the firm's…
Q: given number of questions answer needed
A: Q1) Kiosse Corporation: Material variances: Standard quantity for actual production (SQ): Units…
Q: Use the following information for the Exercises below. (Static) Skip to question [The following…
A: Let's start with calculating the total units available and units sold.Total units available =…
Q: Hi expart Provide solution
A: Part a: Journal Entry at the Date of Purchase (December 31, 2016)Transaction Details:Purchase price…
Q: follow all
A: Detailed explanation:Beginning Direct Materials Inventory $ 26,000Add Direct Materials Purchased on…
Q: For each of the unrelated transactions described below, present the entries required to record each…
A: Transaction 1: Debit the cash account with $19,1701,000 for the cash received from the convertible…
Q: Please Provide answer
A: Return is the amount gained from the purchase of a stock. This will include both the gain from…
Q: Don't use Ai
A: To calculate the total cost of Job X, you need to account for direct materials, direct labor, and…
Q: On November 30, Fleiner Company announced its plans to discontinue the operations of Division P (a…
A: Step 1: Calculations for Division P a) Pretax income or loss from discontinued operations: Revenues…
Q: Answer with detailed explanation of question
A: In the balance sheet, the total assets will equal the total liabilities and stockholders' equity.…
Q: Hi expart Provide correct answer
A: Step 1: Introduction to the Incremental AnalysisThe incremental analysis is used to figure out the…
Q: An investment project costs $22,366 and has annual cash flows of $6,556 for six years. What is the…
A: If the discount rate is zero percent, the discounted payback period is simply the time it takes for…
Q: If you give me wrong answer, I will give you UN helpful rate.
A: We need to find the amount the company must invest now to receive $6,000,000 at the end of 2.5…
Q: Wang Company reports the following for the month of June. June 1 Inventory 12 Purchase 23…
A: (a) Calculation of cost of goods sold and ending inventory using FIFO method.Number of units…
Q: Solve this issue
A: To calculate Monica's lease payments, you can use the formula for the Present Value of an Ordinary…
Q: Bartling Energy Systems recently reported $9,250 of sales, $5,750 of operating costs other than…
A: To solve this problem, we need to calculate both the net income and the free cash flow, then find…
Q: Please don't use ai
A: Part 2:Explanation:Step 1: Calculate the After-Tax Cost of Debt for Delta Innovations1. Determine…
Q: Help me with this question
A: Question: 1Explanation of Earnings Before Taxes (EBT):EBT is the profit a company generates before…
Q: Susan just purchased her first house valued at $200000. She paid a down payment of $20000, and took…
A:
Q: not use ai please
A: Step 1:Prime cost means the cost incurred in manufacturing of goods. Prime cost is the firm's cost…
Q: None
A: Under the Internal Revenue Code (IRC), student loan forgiveness is generally considered taxable…
Q: None
A: Step 1: Define Capital Gain:The increase in the profit earned after the sale of the capital asset of…
Q: I want to answer this question
A: Computation of cost per equivalent unit for material and conversion as follows:Resultant values:
Q: Solve this problem
A: 1. First, we need to identify which costs are included in variable costing. Variable costing…
Q: None
A: aTo record the admission of W. Wolford for a 30% ownership interest with bonuses to the existing…
Q: ??
A: Step 1:To calculate the price of JTM Enterprises' preferred stock, we can use the dividend…
Q: Mason Company has two manufacturing departments -Machining and Assembly. The company considers all…
A: To solve this problem, we need to calculate the manufacturing overhead costs applied to Jobs A and B…
Q: None
A: The correct way to calculate the selling price is as follows: Selling Price = Cost Price / (1 -…
Q: Give correct answer
A: Step 1: Record assets at their fair value. Free assetsUnsecured liabilities without priority…
Q: not use ai please
A: 1. Compute the amount for each of the following:a. Direct materials used:Direct materials used are…
Give answer
Step by step
Solved in 2 steps
- The Rivoli Company has no debt outstanding, and its financial position is given by the following data: What is Rivoli’s intrinsic value of operations (i.e., its unlevered value)? What is its intrinsic stock price? Its earnings per share? Rivoli is considering selling bonds and simultaneously repurchasing some of its stock. If it moves to a capital structure with 30% debt based on market values, its cost of equity, rs, will increase to 12% to reflect the increased risk. Bonds can be sold at a cost, rd, of 7%. Based on the new capital structure, what is the new weighted average cost of capital? What is the levered value of the firm? What is the amount of debt? Based on the new capital structure, what is the new stock price? What is the remaining number of shares? What is the new earnings per share?The Palantir is an all-equity firm with a total market value of $536,000 and 21,200 shares of stock outstanding. Management is considering issuing $133,000 of debt at an interest rate of 9 percent and using the proceeds on a stock repurchase. Ignore taxes. How many shares will the firm repurchase if it issues the debt securities?Charleston Mills is an all-equity firm with a total market value of $221,000. The firm has 8,000 shares of stock outstanding. Management is considering issuing $50,000 of debt at an interest rate of 7 percent and using the proceeds on a stock repurchase. Ignore taxes. How many shares can the firm repurchase if the is issues the debt securities? A- 1,810 shares B- 1,818 shares C- 1,847 shares D- 1,856 shares E-1,899 shares
- Simone's sweets is an all-equity firm that has 6700 shares of stock outstanding at a market price of $18 per share. The firm's management has decided to issue $56000 worth of debt at an interest rate of 6 percent. The funds will be used to repurchase shares of the outstanding stock. What are the earnings per share at the break--even EBIT?Big Industries has the following market-value balance sheet. The stock currently sells for $20 a share, and there are 1,300 shares outstanding. The firm will either pay a $1 per share dividend or repurchase $1,300 worth of stock. Ignore taxes. Assets Liabilities and Equity Cash $ 8,000 Debt $ 11,500 Fixed assets 29,500 Equity 26,000 a. What will be the subsequent price per share if the firm pays a dividend? b. What will be the subsequent price per share if the firm repurchases stock? (Round your answer to the nearest dollar.) c. If total earnings of the firm are $32,300 a year, find earnings per share if the firm pays a dividend. (Do not round intermediate calculations. Round your answer to 3 decimal places.) d. If total earnings of the firm are $32,300 a year, now find earnings per share if the firm repurchases stock. (Do not round intermediate calculations. Round your answer to 3 decimal places.) e. If total earnings of the firm are $32,300 a year,…Paradise Travels is an all-equity firm that has 9,000 shares of stock outstanding at a market price of $27 a share. Management has decided to issue $25,000 worth of debt and use the funds to repurchase shares of the outstanding stock. The interest rate on the debt will be 7.3 percent. What are the earnings per share at the break-even level of earnings before interest and taxes? Ignore taxes.
- Big Industries has the following market-value balance sheet. The stock currently sells for $20 a share, and there are 1,260 shares outstanding. The firm will either pay a $1 per share dividend or repurchase $1,260 worth of stock. Ignore taxes. Liabilities and Assets Equity $ 7,200 Fixed assets 29,300 Debt $11,300 25,200 Cash Equity a. What will be the subsequent price per share if the firm pays a dividend? b. What will be the subsequent price per share if the firm repurchases stock? (Round your answer to the nearest dollar.) c. If total earnings of the firm are $25,500 a year, find earnings per share if the firm pays a dividend. (Do not round intermediate calculations. Round your answer to 3 decimal places.) d. If total earnings of the firm are $25,500 a year, now find earnings per share if the firm repurchases stock. (Do not round intermediate calculations. Round your answer to 3 decimal places.) e. If total earnings of the firm are $25,500 a year, find the price-earnings ratio if the…A firm has no debt outstanding and a total market value of $786,590. Earnings before interest and taxes, EBIT, are projected to be $74, 500. The company is considering a $30,940 debt issue with an interest rate of 8%. The proceeds will be used to repurchase shares of stock. There are currently 33,050 shares outstanding. Ignore taxes for this problem. How many shares were repurchased under this plan? A) 1235 B)1170 C) 1105 D)1365 E) 1300Equity Inc. is currently an all-equity-financed firm. It has 10,000 shares outstanding that sell for $20 each. The firm has an operating income of $30,000 & pays no taxes. the firm contemplates a reconstructing that would issue $50,000 in 8% debt which will be used to repurchase stock. Show the value of the firm, EPS (earnings p. share?) and rate of return on the stock before and after reconstructing. What changed?
- The Greenbriar is an all-equity firm with a total market value of $551,000 and 21,700 shares of stock outstanding. Management is considering issuing $153,000 of debt at an interest rate of 9 percent and using the proceeds on a stock repurchase. Ignore taxes. How many shares will the firm repurchase if it issues the debt securities? Multiple Choice • 49,590 shares • 542 shares 6,026 shares 6,695 shares 7,304 sharesConsider this example: Shares of Ex Why Zee, Inc. (ticker symbol: XYZ) are currently trading at $6 per share. XYZ plans to issue $6M in short term debt and use the money they borrow to repurchase $6M worth of their own stock. What effect will the debt issuance and share repurchase have on the balance sheet? There isn't enough information to answer this question Assets will increase by $6M Liabilities will decrease by $6M Number of Shares Outstanding will increase by 1 million Equity will decrease by $6MRefi Corporation is planning to repurchase part of its common stock by issuing corporate debt. As a result, the firm’s debt-equity ratio is expected to rise from 30 percent to 50 percent. The firm currently has $2.7 million worth of debt outstanding. The cost of this debt is 9 percent per year. The firm expects to have an EBIT of $1.26 million per year in perpetuity and pays no taxes. a. What is the market value of the firm before and after the repurchase announcement? (Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) b. What is the expected return on the firm’s equity before the announcement of the stock repurchase plan? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What is the expected return on the equity of an otherwise identical all-equity firm? (Do not round intermediate calculations and…
