Stock priceShares outstanding(millions)Mkt value Debt(millions)Capitalization (bookvalue)DebtEquityBetaTarget D/ECost of debtMarket InfoRisk-free rateComparable Company101,00010,00020.00%80.00%1.40n/a6.50%4.00%Market Risk Premium 5.00%CompanyAn/an/an/a25.00%75.00%n/a0.805.00%Required:Use the relevant Comparable Company and Company A to calculate the WACC for Company AAssume the tax rate for both companies is 30%.

WACC is the cost of capital of the company and is weighted average cost of equity and weighted cost…

Answered: Stock price Shares outstanding…

Stock price Shares outstanding (millions) Mkt value Debt (millions) Capitalization (book value) 10 1,000 10,000 n/a n/a n/a

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

Problem 1PS

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1 Following is the Balance sheet of Jay Limited: Liabilities Equity Shares of Rs. 10 each Retained Earnings } VESHUR 6% Preference Share of Rs.10 each General Reserve Debenture Redemption Fund 5% Debentures Sundry Creditors Total Liabilities Amoun Required: Calculate value per share by using following 1. Yield Method 2. Net Assets Method t 300,000 200000 Assets Fixed Assets Allowances for Depreciation 21 13303 90,000 880,000 200,000 Current assets 5,000 Preliminary Expenses Unwritten Off Discount 25,000 60,000 Amoun t 600,000 (75,000) 340,000 10,000 5,000 Total Assets Current Assets include investments of Rs.50,000 market price of which is Rs.90,000. Debtors included in current assets are doubtful to the extent of Rs.25,000 for which no provision has been made so far. Debenture interest owes for two years and preference dividends are in arrear for two years. Earnings before tax is Rs.280,000 and Tax rate is 35%. The normal rate of dividend is 20%. 880,000
Compute Proprietary Ratio From the following Particulars $ Equity Share Capital 5,00,000 Preference Share Capital 2,70,000 Reserves and Surplus 65,000 Trade Payables 1,10,000 Fixed Assets 7,00,000 Non-Current Investments 2,45,000 Current Assets 3,00,000 Debentures 3,00,000
4.Which of the following alternatives represents the correct debt-equity ratio for year 2021?A. 50,22%B. 18,89%C. 30,15%D. 17.19%E. 19,57%
Assume the capital structure of XYZ Company: Bonds payable, 10% . . . . . . . 500,000 Preferred stock, 8%, P100 par . . . . . . . . 100,000 Common stock, 100,000 shares. . . . . . . 400,000 Other data shows as follows: Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . 800,000 Variable costs. . . . . . . . . . . . . . . . . . . . . . 362,500 Fixed Operating costs. . . . .. . . . . . . . . . . 187,500 Income tax rate . . . . . . . . . . . . . . . 30% Dividend growth rate . . . . . . . . . . . . . . . . 2% Current market price: Common stock. . . . . . . . . . . . . P5/share Preferred stock. . . . . . . . . . . . . P160/share Transaction costs: Common stock. . . . . . . . . . . . . . P1/share Preferred stock. . . . . . . . . . . . . . P 10/share What is the cost of issuing debt securities?
Find the EPS, P/E ratio, and dividend yield of a company that has six million shares of common stock outstanding (the shares trade in the market at $30), earns 12% after taxes on annual sales of $80 million, and has a dividend payout ratio of 35%.
7) What account should you debit when you declare a 2: 1 stock split on 100,000 common shares outstanding, par value is $2/share and selling price is $100/sh?
1.The acid test ratio in year 2021 is as follows: A. 1,72:1B. 2,61:1C. 1,94: 1D. 1,26:1E. 1.31:1
Manisha
A7 please help.......
Assume the capital structure of XYZ Company: Bonds payable, 10% . . . . . . . 500,000 Preferred stock, 8%, P100 par . . . . . . . . 100,000 Common stock, 100,000 shares. . . . . . . 400,000 Other data shows as follows: Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . 800,000 Variable costs. . . . . . . . . . . . . . . . . . . . . . 362,500 Fixed Operating costs. . . . .. . . . . . . . . . . 187,500 Income tax rate . . . . . . . . . . . . . . . 30% Dividend growth rate . . . . . . . . . . . . . . . . 2% Current market price: Common stock. . . . . . . . . . . . . P5/share Preferred stock. . . . . . . . . . . . . P160/share Transaction costs: Common stock. . . . . . . . . . . . . . P1/share Preferred stock. . . . . . . . . . . . . . P 10/share What is the cost of issuing preferred securities?
from the given information calculate EFS and P/E ratio Net Income : 5,00,000 8% prference share 2,00,000 number of outstanding shares :75000 market price = 50 RS per share

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