SPLI, Inc. has a Debt to Equity Ratio of 3:1. After tax cost of debt is 5% while cost of equity is 10%. The Board of Directors of the company decided to sell 100% of the company for Php 1 Billion. Compute for the projected monthly average earnings assuming an EVA of Php 57,500,000.00 a. 37,500,000 b. 10,000,000 c. 120,000,000 d. 100,000,000

Q: Hutchinson Corporation has zero debt - it is financed only with common equity. Its total assets are…

A: Debt ratio is the measure which is used to help the entity to know if it would be able to pay off…

Q: Edsel Research Labs has $26.40 million in assets. Currently half of these assets are find with…

A: Earnings per share:A financial indicator called earnings per share (EPS) shows how much of a firm's…

Q: IN CAPITAL generates pre-tax operating cash flows (asset flows) of MM$ 4,000 per year in perpetuity.…

A: Value of equity with perpetual cash flow is calculated as shown below.

Q: Morrow Corp. has an EBIT of $935,000 per year that is expected to continue in perpetuity. The…

A: Value of unlevered firm= EBIT*(1-tax rate)/unlevered cost of equity= 935000*(1-21%)/14%= 5276071.43

Q: Canopy Growth Corporation (CGC) has $3,127,000 in assets that are currently financed with 100%…

A: Solution:- Return on Equity (ROE) refers to the percentage of earnings on its equity. So, ROE = (Net…

Q: Rain company whose tax rate is 40% has a total asset of P500,000,000 and earnings before interest…

A: Interest Payment is calculated on the debt part out of the total funds of the company. Net Income is…

Q: Company A has a debt to equity ratio of 0.55. The company is considering a new plant that will cost…

A: The question is releted to calculation of weighted Average flotation cost. The details are given.

Q: Bolero Corporation has one long term loan (interest bearing debt) of $700,000 at an interest rate of…

A: Given: Particulars Amount Rate Debt $700,000 5.20% Equity $1,000,000 16.00%

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: Well Established Company's most recent balance sheet is as follows: Liabilities Equity @Rs 10 per…

A: Leverages- Leverage is a phrase used to describe the usage of assets and liabilities with fixed cost…

Q: Hutchinson Corporation has zero debt - it is financed only with common equity. Its total assets are…

A: Debt ratio is the measure which is helpful for the entity to know if it would be able to cover its…

Q: Company A had 30% debt and 70% equity (in market value terms). It had 1 million shares outstanding,…

A: We first need to calculate amount needed to buy back stock. Amount needed to buy back Stock =…

Q: Date Wireless has the following assets: Current assets: Temporary $1,190,000 Permanent 1,380,000…

A: Earning Per Share: A company's profitability is shown by the amount of money it earns per share,…

Q: Legend is a firm with $250 million in assets and no debt financing. The shareholders of Legend have…

A: Given, Debt amount is $75 million Interest rate is 8% Corporate tax rate is 31%

Q: o Coal Company has estimated the costs of debt and equity capital (with bankruptcy and agency costs)…

A: Weighted average cost of capital of the company is the weighted cost of debt and weighted cost of…

Q: Maslyn Corp. has an EBIT of $985,000 per year that is expected to continue in perpetuity. The…

A: Value of the company consists of two components. One is debt or debentures held by the company and…

Q: In Geri Co, the 5 year weighted average historical pre-tax economic earnings are $1,250,000. The…

A: Calculate Cap Rate: ​Given:Weighted Average Historical Pre-tax Economic Earnings = $1,250,000Tax…

Q: A company has 35% of its balance sheet as debt with a total amount of assets of EUR 17,000,000.If…

A: Weight of debt = 35% Weight of equity = 100% - 35% = 65%

Q: A company just issued $225000 of perpetual 6% debt and used the proceeds to repurchase stock. The…

A: Equity value refers to the investment amount by the investors for buying the equity shares in the…

Q: Planet Express has liabilities of $400 and assets of $1000. The average YTM on its debt is 10% and…

A: FORMULA FOR WACC: WACC=WP×KP+WD×KD×1-TAX WHERE, WD=weight of debtwp=weight of preferred sharekd=cost…

Q: What is the % of Debt in the Capital Structure?

A: Information Provided: Bok value of debt = $600M Book value of equity = $1400M Current price of stock…

Q: The Jacks corporation reported the following: i. Net income $ 840,000.00 ii. Accounts payable and…

A: Ratio Analysis: This is the process of computing, determining, and presenting the relationship of…

Q: Morrow Corp. has an EBIT of $875,000 per year that is expected to continue in perpetuity. The…

A: According to collect from the dataLet us assume that the data As Followed By

Q: pected to generate net income of $40 million next year and will pay $20 in after tax interest…

A: The current value of a future sum of money or stream of cash flows, given a specified rate of…

Q: the specifics for a company are as follows: tax rate 35% Equity = 6,300,000…

A: A company may raise funds from multiple sources like common and preferred stock, debt, bonds, etc. A…

Q: A Corporation has P1,500,000 in debt outstanding. The company's before-tax cost of debt is 10%.…

A: Debt (D) = P 1500000 Interest rate = 10% Sales (S) = P 3500000 Net income (NI) = P 600000 60% is…

Q: A company just issued $140000 of perpetual 9% debt and used the proceeds to repurchase stock. The…

A: The value of equity can be computed by deducting the value of debt from the value of the levered…

Q: A totally equity financed company with 15 000 outstanding ordinary shares, each with a book value…

A: Tax Rate = 28% Sales = 600,000 Fixed Costs = 100,000 Variable Costs = 30%*Sales = 30%*600,000 =…

Q: The CFO of Yang Centers has asked you to calculate the EPS if the company were to change its capital…

A: Debt = 90% of Total Capital= 90% * 4,000,000= 3,600,000Interest Expenses= Debt  * Interest rate=…

Q: How much debt does the company now have, to the nearest thousand dollars? How much equity? What is…

A: Weighted average cost of capital (WACC) refers to the joint cost of company's capital from all the…

Q: A company just issued $351000 of perpetual 8% debt and used the proceeds to repurchase stock. The…

A: The value of equity can be computed by deducting the value of debt from the value of the levered…

Q: he Alcatel has a tax rate of 30%. The company can raise debt at a 12% interest rate and the last…

A: Weighted average cost of capital is weighted cost of debt and weighted cost of equity and this…

Q: In January 2008, Apex Company Ltd. issued 5000 shares tk. 100 each and took bank loan tk. 200,000 at…

A: A shareholder is an individual who possesses stocks in your company, whereas a stakeholder is…

Q: ABC Corp is a manufacturing company with the following information: 1. Financial Statements: • Net…

A: The objective of the question is to calculate the intrinsic value per share for ABC Corp using…

Q: Consider the following simplified financial statements for the Wims Corporation (assuming no income…

A: BALANCE SHEET The balance sheet is one of the important financial statements of the company. Balance…

Q: A company has debt, equity share and overdraft financing. The overdraft is used to finance the…

A: After tax cost of debt = 12% Cost of equity = 20% After tax cost of overdraft = 18%

Q: Edwards Construction currently has debt outstanding with a market value of $75,000. The company has…

A: The market value of Debt=$75,000 The weighted average cost of capital (WACC)=10% Tax rate=20%…

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.