Please correct answer and don't used hand raiting Fact pattern: $ in millions, EBITDA at Close $27, Exit Multiple 9.5x, Investment Hold Period 5years, Liquidation Preference 1.0x, preferred annual PIK Dividend 10%, Target Balance SheetItems Cash 10, Revolver 6.5, Senior Debt 85, Preferred Equity (excl, Dividend). Based on thisfact pattern what is the Equity Available to Common? $0M, $50M, $80.5M, $94.5M, or $175M?

To calculate the Equity Available to Common based on the given fact pattern, we need to work through…

Answered: Fact pattern: $ in millions, EBITDA at…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 15.3.2MBA

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Assume that Firm A is an all-equity firm with total assets of $5,000 and the following distribution of EBIT for the coming year: Firm A Unlevered Probability EBIT Interest EBT Taxes (40%) Net Income BEP ROA ROE Bad O 3.487% O 2.653 % O 3.098% O 3.774% O 2.800% 30.00% $500.00 $0.00 $500.00 -$200.00 $300.00 10.00% 6.00% 6.00% Economy Average 50,00% $700.00 $0.00 $700.00 -$280.00 $420.00 14.00% 8.40% 8,40% Good 20.00% $900.00 $0.00 $900.00 -$360.00 $540.00 18.00% 10.80% 10.80% Now assume that the firm plans to issue $2,000 of debt, at an interest rate of 6.4 percent, and use the proceeds to repurchase equity (you may ignore potential impacts on price and assume that the firm will then have $3,000 of equity). Given this information, determine the standard deviation of the new ROE distribution.
20Y8 20Υ7 20Υ6 20Y5 20Υ4 Net income $1,120,400 $965,900 $811,700 $693,800 $588,000 Interest expense 380,900 347,700 300,300 229,000 182,300 Income tax expense 358,528 270,452 227,276 180,388 141,120 Total assets (ending balance) 6,308,280 6,633,962 4,788,646 4,965,740 3,765,686 Total stockholders' equity (ending balance) 2,021,243 2,424,789 1,550,109 1,918,695 1,151,217 Average total assets 6,471,121 5,711,304 4,877,193 4,138,117 3,517,352 Average stockholders' equity 2,223,016 1,987,449 1,734,402 1,534,956 1,342,466 You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have remained relatively steady at the following levels for the last five years: 20Y4-20Y8 Return on total assets 22.9% 47.2% Return on stockholders' equity 4.6 Times interest earned 2.1 Ratio of liabilities to stockholders' equity Required: 1. Determine the following for the years 20Y4 through 20Y8. Round to one decimal place: a. Return on total…
You have the following information: total assets = $200 million; risk-adjusted assets = $90 million; owners' equity = $3.5 million; Trust-preferred securities = $0.7 million; loan loss reserve = $1.5 million; & subordinated debt = $2 million Calculate: 1. Equity Capital Ratio 2. Tier 1 Ratio 3. Total Capital Ratio
Of the investments listed in the table below, which will give you the highest holding period return? Investment Original cost Selling price Distributions received CD $500.00 $540.00 $10.00 Common stock $2300.00 $3400.00 $20.00 Bond $1,040.00 $980.00 $80.00 Preferred stock $2000.00 $2100.00 $200.00
Assume Skyler Industries has debt of $4,775,777with a cost of capital of 7.8% and equity of $5,798,398 with a cost of capital of 9.6%. What is Skyler’s weighted average cost of capital for equity? Round to the nearest hundredth, two decimal places and submit the answer in a percentage.
Stock price Shares outstanding (millions) Mkt value Debt (millions) Capitalization (book value) Debt Equity Beta Target D/E Cost of debt Market Info Risk-free rate Comparable Company 10 1,000 10,000 20.00% 80.00% 1.40 n/a 6.50% 4.00% Market Risk Premium 5.00% Company A n/a n/a n/a 25.00% 75.00% n/a 0.80 5.00% Required: Use the relevant Comparable Company and Company A to calculate the WACC for Company A Assume the tax rate for both companies is 30%.
What is the debt ratio? What is the equity-debt ratio? (Equity/Total Debt) What is the debt to equity ratio?
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Financials of X Ltd are as follows. 10% Debt 6500; Current Market Price 80.21; Equity Beta 1.25; Equity Capital (Rs 10) 1900; Market Risk Premium 6; PAT 1235; Retained Earnings 4100; Risk Free Return 7%; Tax 35%. Find market value added. a. Rs 9329.30 b. Rs 9932.90 c. Rs 9239.90 d. Rs 9329.90
Please calculate investment in net working capital, net cash flows, and present value of net cash flows! Thank you!
Why do you deduct or subtract 1 to flotation cost? Example: Given; Annual dividend (D) = $4.75 Flotation cost (F) = 0.05 or 5% Number of shares issued (N) = 10,000 Stock price (P0) = $50 Formula; Total value able to receive = N * P0 * (1 - F) Total value able to receive = 10,000 * $50 * (1 - 0.05) Total value able to receive = $500,000 * 0.95 Total value able to receive = $475,000
EXAMPLE 10: From the following, compute Debt Equity Ratio: Equity Share Capital 1,00,000 General Reserve 80,000 6.5 % Debentures 75,000 Current Liabilities 90,000 o add notes COMMENTS OTES

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