Need help with this question solution general accounting EMM Ltd has assets with a market value of $400 million,$60 million of which is cash. It has debt outstanding witha market value of $150 million, and 20 million sharesoutstanding. Assuming perfect capital markets, if thecompany distributes the $60 million in cash as a dividend,calculate its debt-to-equity ratio after the dividendpayment.

Step 1:Computation of the market value of the total equity after dividend: (Market values) Note: No…

Answered: EMM Ltd has assets with a market value…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 8P

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XYZ Corp. has assets with a market value of $500 million, including $80 million in cash. The company has debt outstanding with a market value of $200 million and 25 million shares outstanding. Assuming perfect capital markets, if the company distributes the $80 million in cash as a dividend, what will its debt-to-equity ratio be after the dividend payment?
The debt-to-equity ratio after the dividend payment
MNO Oil has assets with a market value of $600 million, $64 million of which are cash. It has debt of $250 million, and 20 million shares outstanding. Assume perfect capital markets. If MNO Oil distributes the $64 million as a dividend, then its stock price after the dividend will be closest to:
The debt-to-equity ratio after the dividend payment account
I want to correct answer general accounting
General accounting
Assume Lavender Corporation has a market value of $4 billion of equity and a market value of $19.8 billion of debt. What are the weights in equity and debt that are used for calculating the WACC?
You are given the following information: Stockholders’equity as reported on the firm’s balance sheet = $6.5 billion, price-earnings ratio = 9, commonshares outstanding = 180 million, and market/book ratio = 2.0. The firm’s marketvalue of total debt is $7 billion, the firm has cash and equivalents totaling $250 million, andthe firm’s EBITDA equals $2 billion. What is the price of a share of the company’s commonstock? What is the firm’s EV/EBITDA?
Cliff Corp (CC) has assets of $300 million including $25 million in cash. CC has 1 million share of stock outstanding and $70 million of debt. Assume capital markets are perfect. What is CC’s current debt-to-equity ratio? What is CC’s current stock price? If CC distributes $18 million in dividends, then what is the new ex- dividend share price? If instead of paying the dividend CC repurchases $18 million of stock, then what will be the new share price? What is the new debt-to-equity ratio after the payout?
Alpha Corporation has average annual free cashflows to the equity holder and to the firmof P3,000,000 and P3,350,000 respectively. Assuming that the weighted average cost ofcapital and actual return of on assets is 16.75% while the market return on Alpha's debt is7%, what is the value of its equity? a. P34,358,974.36 b.P15,000,000.00 c.P17,910,447.76 d.P20,000,000.00
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Suppose Beta Industries and Delta Technology have identical assets that generate identical cash flows. Beta Industries is an all-equity firm, with 7 million shares outstanding that trade for a price of $16.00 per share. Delta Technology has 22 million shares outstanding, as well as debt of $33.60 million. a. According to MM Proposition I, what is the stock price for Delta Technology? b. Suppose Delta Technology stock currently trades for $8.27 per share. What arbitrage opportunity is available? What assumptions are necessary to exploit this opportunity? a. According to MM Proposition I, what is the stock price for Delta Technology? According to MM Proposition I, the stock price per share for Delta Technology is $ (Round to the nearest cent.)

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