Q19. Subwave Corporation currently trades at a PB ratio of 5 and a PS ratio of 20. Subwave Corporation has a net profit margin (NPM) equal to 40%. The return on equity (ROE) of Subwave Corporation must be equal to: OPtions    12.5% 5% 25% 10%

Q: A company pays an annual dividend of 15 USD. There is no growth in the amount of dividends and the…

A: Dividend discount model estimate the stock price. Where there is no growth rate, stock price can be…

Q: Need Correct answer from option

A: 1. Calculate Return on Assets (ROA):ROA = Net Income / Total AssetsROA =20,000 / 240,000 = 0.0833 or…

Q: Q2: < DEK Corporation has ROE of 20% and a retention (plowback) ratio of 60% in 2020. Suppose the…

A: Retention ratio is the part of earnings that is retained by the company for future expansion. The…

Q: XYZ Company has raw beta of 090. Tx te is 21% XYZs corporate struchure is 65% debt and 35 equity.…

A: Unlevered beta measures a company's market risk without taking debt into account. When beta is…

Q: Blue Fire has an equity multiplier of 2.4, a total asset turnover of .35, and a profit margin of 8.5…

A: Equity multiplier = 2.4 times Total asset turnover = 0.35 times Profit Margin = 8.5%

Q: Using information about the following company, calculate the share premium / (discount) a private…

A: Leveraged Buyout: A leveraged buyout occurs when a company acquires another by taking on a…

Q: The MEDCOM firm is currently selling for €32, with trailing 12-month earnings and dividends of €1.23…

A: There are various financial measures that help to ascertain the fundamental price of a stock and…

Q: PVE Inc. has $15 million of debt outstanding with a coupon rate c the firm's tax rate is 35%, what…

A: Yield to maturity is the rate of return realized on bond when held till maturity and is the before…

Q: Q6. Collateral Debt Obligations (CDOS) Consider a CDO with a total notional of $500 million,…

A: c. Plotting the payoff of the Mezzanine tranche:d. Representing the Mezzanine tranche payoff as a…

Q: A company Is 36% financed by risk-free debt. The Interest rate Is 9% the expected market risk…

A: Weighted average cost of capital (WACC) is the total combined cost of capital that a business entity…

Q: Company 7 has 10% debt and a cost of debt of 5.5%. The firm's WACC is currently 11.35%. Assume there…

A: WACC refers to weighted average cost of capital. It takes into consideration the percentage of each…

Q: 6. a firm has 5% cost of debt and 10% cost of equity. Market value for bonds is $20m, and $80m for…

A: The term WACC or weighted average cost of capital refers to the total cost the company incurs in…

Q: Ganado and Equity Risk Premiums. Maria Gonzalez, Ganado's Chief Financial Officer, estimates the…

A: To calculate the weighted average cost of capital (WACC) using the Capital Asset Pricing Model…

Q: Calculate the Price-to-Revenue transaction price is $550,000,000 660.500 0.200 Ratio for the…

A: Since you have asked multiple question, we will solve the first question for you.  If you want any…

Q: The shareholders of AA Limited expects a Return on Equity (ROE) of 12% and has decided to maintain…

A: 1.  g = ROE * rrwhere,g = growth rateROE = return on equityrr = retention ratio2. According to…

Q: ration A traded at a P/B (price-to-book) ratio of 0.5. Its most recent reported ROCE is 10% and its…

A: The ROCE is return on total capital debt ,loan and equity employed by the company and return on…

Q: Face Mask Company has a Total Sales of P100,000,000. Its total assets is 50,000,000 and a profit…

A: The mathematical equation:

Q: 24. Namak Co. has an ROE=20%, TATO = 2.5, Equity multiplier of 3, and sales =$30,000. Calculate the…

A: Sales = $30,000 TATO = 2.50 Equity multiplier = 3 Equity = (Sales/TATO)/Equity multiplier…

Q: Carson Electronics uses 70 percent common stock and 30 percent debt to finance its operations. The…

A: To calculate the WACC we will use the below formula   WACC = (Rd*D)+(Re*E) Where Rd - After tax cost…

Q: ESS Company's current liabilities are P50,000, its long-term liabilities are P150,000, and its…

A: Long term assets are those assets which are being held by the business for longer period of time.…

Q: The following details were summarized for National Corporation: Year 2017 Per Share Dividend P2.99…

A: Here, Current Market Price is P62 Issuance Expense per Share is P2.00

Q: 6. PPC plc, is a utility company, that has listed its preferred stocks on the Athens Stock Exchange.…

A: Dividend Yield = 5.7%Face Value = 100€Rate of return = 4.8%

Q: Using the information in the two figures below and assuming that the risk free rate is 3.8% and the…

A: Pre tax cost of debt is computed as follows:-Pre tax cost of debt =

Q: Using the FTE approach, find the value of the firm:

A: Calculation of FCF:

Q: The eps of a company is rs.20. The market rate of discount applicable to the company is 15%.…

A: Walter's model says that the dividend policy is relevant for the valuation of the firm. It is the…

Q: A firm has a profit margin of 35.92, return on assets of 25.86 and a debt to equity ratio of 1.489.…

A: The  calculation of return on equity ,Return of equity is the measure of company annual return as it…

Q: g information is for Cougar Corp. an appliance manufacturer. Given this information determine…

A: The implied rate is the interest rate that is calculated by subtracting the spot rate from the…

Q: Assumptions: (a) Mr. X has a limited cash balance of P1,000,000.00. (b) The buying price of the…

A: Mr. X should sell his shares to Mr. if his sale proceeds cover costs associated with the stock i.e…

Q: Suppose that XTel currently is selling at $50 per share. You buy 800 shares using $30, remainder of…

A: Rate of return on investment (ROI) is a financial metric used to evaluate the profitability of an…

Q: calculate the cost of the preference share

A: Cost of preference share = Annual dividend/Current price

Q: Destin Company Information: Total Assets $940,000 Total Liabilities $600,000 Cost of debt 5.8%…

A: Capital Asset pricing model (CAPM) With risk free rate (RF), beta and market return (MR), the…

Q: Blue Fire, Inc., has sales of $60 million, total assets of $42 million, and total debt of $18…

A: Note: All the given options are incorrect, so we are solving the correct one for you as per the…

Q: The market capitalization rate on the stock of Aberdeen Wholesale Company is 14%. Its expected ROE…

A: The DDM model states that dividends are the best indicators of the stock price of the company, which…

Q: Schmidt and Sons Co. has an optimal debt-equity ratio of 1.5. To issue new equity, the company must…

A: The flotation costs for the company refer to the costs that the company bears to issue new equity or…

Q: Matilda Industries pays a dividend of £2.10 per share and is expected to pay this amount…

A: Solution: Given, Dividend paid per share =D0 = £2.10 As given in the question, Expected dividend…

Q: Ursala, Incorporated, has a target debt-equity ratio of 1.47. Its WACC is 8.7 percent, and the tax…

A: To solve this question, understanding the computation of weighted average cost of capital (WACC) is…

Q: Upton Umbrellas has a cost of equity of 10.6 percent, the YTM on the company's bonds is 5.2 percent,…

A: WACC is the weighted average cost of capital. For computing WACC we need proportion of equity and…

Q: A firm in steady-state earned $5 per share this year and paid a $4 dividend. The firm is currently…

A: Earning per share (EPS) =5Dividend per share (DPS) = 4Stock Price = 55ROE = 0.08Discount Rate = 0.1

Q: The financial breakeven point of Soil Inc. is P90,000, while the tax rate applicable to the company…

A: At financial breakeven point, EBIT level is such that net income is zero. EBIT = P 90000 Tax rate =…

Q: Equity  = 6,300,000 Debt =  3,920,000 Preferred stock   = 6,000,000 Cost of eqiuty   = 10.91% cost…

A: The WACC of the company is the average return that the company provides to its stakeholders for…

Q: It is 2022. You are investigating the possibility of making an equity investment in Walkerville…

A: Terminal value of firm at year 2 (TV)= FCF2*(1+g)/(WACC - g) = 35*1.02/(0.11-0.02)= 396.6666667

Q: If the company’s Earnings before interest and taxes (EBIT) is OMR 500,000, the weighted average cost…

A: Market value of firm under net income approach  = EBIT /Cost of capital SO, EBIT  = Market value *…

Q: Dunlop Corp. has computed its cost of equity as 15% using the discounted cash flow method, 14% using…

A: Cost of equity can be determined using three different ways. a) Capital Asset pricing Method where,…

Q: If a company issues common stock and coupon bonds and the debt-to-equity ratio are 0.85, the cost of…

A: Given information Debt Equity ratio = 0.85 Cost of equity = 12% Pretax cost of debt = 7% Tax rate =…

Q: Choose the correct option with detailed explanation

A: Solution:We know that, Equity multiplier = 1 + Debt equity ratio                               = 1 +…

Q: You are analyzing the price/book value ratios for seven firms in the hospitality industry, lative to…

A: Price-to-Book Value (P/B) is a financial ratio that compares a company's market price per share to…

Q: Nnana Ltd currently retains 60% of its earnings which are R6 a share this year. It earns an ROE of…

A: Retention ratio = 60%/100 = 0.60 in decimalsCurrent earnings per share = 6ROE = 30%/100 = 0.30 in…