Joe's Coffee reports net operating profits after tax (NOPAT) of $250,000 for the fiscal year ending 12/31/20. Their net operating assets at the beginning of the fiscal year were $120,000. Assuming a weighted average cost of capital (WACC) of 6%, what is Joe's Coffee's ROPI? Joe's Coffee is publicly traded, there are 1000 shares available. Coffee, unbeknownst to the world, will be deemed illegal in two years, rendering all coffee businesses out of business. Using the calculated ROPI, what is each share of Joe's Coffee worth? Use a "Risk Free Rate" of Interest of 1.5% in your Present Value calculation.
Joe's Coffee reports net operating profits after tax (NOPAT) of $250,000 for the fiscal year ending 12/31/20. Their net operating assets at the beginning of the fiscal year were $120,000. Assuming a weighted average cost of capital (WACC) of 6%, what is Joe's Coffee's ROPI? Joe's Coffee is publicly traded, there are 1000 shares available. Coffee, unbeknownst to the world, will be deemed illegal in two years, rendering all coffee businesses out of business. Using the calculated ROPI, what is each share of Joe's Coffee worth? Use a "Risk Free Rate" of Interest of 1.5% in your Present Value calculation.
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
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Transcribed Image Text:Joe's Coffee reports net operating profits after tax (NOPAT) of $250,000 for the fiscal year ending 12/31/20. Their net
operating assets at the beginning of the fiscal year were $120,000. Assuming a weighted average cost of capital (WACC)
of 6%, what is Joe's Coffee's ROPI?
Joe's Coffee is publicly traded, there are 1000 shares available. Coffee, unbeknownst to the world, will be deemed illegal
in two years, rendering all coffee businesses out of business. Using the calculated ROPI, what is each share of Joe's Coffee
worth? Use a "Risk Free Rate" of Interest of 1.5% in your Present Value calculation.
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