Explain the two main components that determine a firm's franchise value. If a company has a base cost of equity of 13% and does not possess any franchise value, calculate its P/E ratio.
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- The activity ratios measure which of the following? Select one: O a the efficiency of the company's supply chain O b. the efficiency with which a company generates sales from its assets Oc the profitability of the company's activities Od the production efficiency of a company's fixed assets If the assumption of financial distress costs is added, then Modigliani and Miller (with taxes) predicts that the optimal capital structure is 100% debt Select one: O True O FalseAs the assistant to the CFO of Johnstone Inc., you must estimate its cost of common equity. You have been provided with the following data: D0 = $0.80; P0 = $22.50; and g = 8.00% (constant). Based on the DCF approach, what is the cost of common from retained earnings? Please show formula and answerDiscuss the two factors that determine the franchise value of a firm. Please solve these general accounting question
- if a company profit margin is 0.6 and the current ratio is 0.6, is it advisable to invest in the company or not?Assume that you are a consultant to Broske Inc., and you have been provided with the following data: D1 = $0.80; P0 = $32.50; and g = 8.00% (constant). What is the cost of equity from retained earnings based on the DCF approach?What is WACC (select all that are true)? Group of answer choices Rd (1-Tc) * D/V + Re * E/V Weighted Average Cost of Capital For a firm overall, it is based on the riskiness of the firm's assets While it is generally estimated by looking at the right-hand-side of the balance sheet, it is largely driven by the left-hand-side (i.e., assets) It is the amount that equity holders demand for an investment in a firm It is the amount that debt holders demand for a loan made to the firm
- Which one of the following will decrease the net working capital of a firm? Assume the current ratio is greater than 1.0. A. selling inventory at cost B. collecting payment from a customer C. paying a payment on a long-term debt D. selling a fixed asset for book value E. paying a supplier for the purchase of an inventory itemPlease provide correct answer with correct solution1. Determine the weighted average cost of capital (WACC) for Vigour Pharmaceuticals. use the following Formulae: WACC: (E/ V) x R e + ( D/ V) x R d x (1-Tc) whereas: E is for Equity ( market value of firm's equity) D is for Debt ( market value of firm's dept) V is for Value ( combine market value which is D + E) R e is the cost of equity R d is the cost of debt Tc is the corporate tax rate
- Please provide correct solution for problemUsing the information in the following chart, and PE Multiples, what is the per-share intrinsic value of Firm A's equity? That is, calculate the estimated per-share intrinsic value of Firm A's equity using the price-to-earnings (P/E) multiples below. Note: You should form (separate value estimates using the average price-to-book ratio and average price-to-earnings ratio for three comparables (Firms B, C and D) Book Value of Share Price (5) Shares Outstanding Common Equity (5) Earnings Per Share (EPS) (5) 2,000,000 20,000,000 8.00 Firm A 100.00 Firm B 200.00 3,000,000 50,000,000 14.00 Firm C 400.00 6,000,000 160,000,000 30.00 Firm D 800.00 12,000,000 880,000,000 60.00 A $100 B $126.36 C) $142.90 $109.21Solve this question
