YearRevenueFixed costsVariable costs011000.00150.00200.00Add. investment in NWC10.00Add. investment in operating long-term70.00assetsDepreciation60.00Interest expenses35.00Newly issued debt25.00Principle repayments15.00Market value of the firm:Short-term debtLong-term debtPriceper share No. of shares Market value200.00600.0018.001001,800.002,600.00Common stockTotalCost of equity (Rs)Tax rate0.14000.40Growth rate per year from year 1 through0.12year 5Growth rate after year 50.05Based on the above information, what is the stock price per share based on the equityfree cash flow model?Select one:O a. 36.46O b. 40.33O c. 44.47O d. 32.53

Detailed explanation:Problem OverviewYou are required to calculate the stock price per share based…

Answered: Year Revenue Fixed costs Variable costs…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter7: Types And Costs Of Financial Capital

Section: Chapter Questions

Problem 13EP

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Can you explain the information below market value added (MVA) analysis and interpretation of results below. Market Value of Equity:$133,341,000,000.00 Plus: Market Value of Debt:$13,677,000.00 Equals: Market Value of Firm:$133,354,677,000.00 Minus: Total Invested Capital:($1,944,100.00) Equals: MVA$133,356,621,100.00
Ef 17.Can you please provide the explanation, formula and correct answer for the problem above?
if A firm's current balance sheet is as follows: Assets $100 Debt $10 Equity $90 a. what is the firm's weighted-average cost of capital at various combinations of debt and equity, given the following information? Debt/assets after-tax cost of Debt cost of equity cost of capital 0% 8% 12% ? 10 8 12 ? 20 8 12 ? 30 8 13 ? 40 9 14 ? 50 10…
Return on Capital Employed (ROCE) = For Riccarton PLC: ROCE = 50000/380000 X 100 = 13.2% For Edinburgh PLC: ROCE = 45000/230000 X 100 = 19.6% Current Ratio = Current assets/current liabilities For Riccarton PLC: Current ratio = 150/120 = 1.25 For Edinburgh PLC: Current ratio = 80/70 = 1.14 Gearing Ratio = (long term borrowing + short term borrowings) / equity For Riccarton PLC: Gearing ratio = (180 + 100)/200 = 1.4 For Edinburgh PLC: Gearing ratio = (100 + 50)/130 = 1.15 Price/Earnings (P/E) Ratio = Share price / earnings per share For Riccarton PLC: P/E Ratio = 195/35 =5.57 For Edinburgh PLC: P/E Ratio = 451/28 = 16.107 Based on the above ratios explain, which company George H. and James W. should invest in. You should also briefly discuss the limitations of your analysis.
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Question 14 Your company has compiled the following data which is based on current costs relative to its sources of external capital ie long-tem debt, preferred stock and common stock equity for various ranges of financing. Source af Capital Long-lerm debt Range of Total New Financing O to After-tax Cost 4 % 1697594 8 1697595 to 3259148 12 3259149 to above Proferred stock 17 O to 936034 22 936035 to above Common stock equity 18 0 to 1141333 21 1141334 to 2808705 25 2808705 to 3549127 26 3549127 to above Curent retained earmings in coming year Cost of rotained eamings based on current eanings The target capital structure proportions are: Target capital structure Long-term debt 628988 18 % 32 % Preferred stock 11 % Equity 57 % Calculate the WACC prior to he firm exhausting its retained earrings Answer The firm expects its range of total new financing to be Calculate the WACC based on new range. Answer 3156574
Can you show me using excel calculations please?
Assume that your company is trying to determine its optimal capital structure, which consists only of debt and common stock. To estimate the cost of debt, the company has produced the following table: 09.86% 9.56% Percent Financed With Debt 10.16% 8.96% 9.26% 0.10 0.20 0.30 0.40 0.50 Percent Financed With Equity 0.90 0.80 0.70 0.60 0.50 Debt/Equity Ratio Now assume that the company's tax rate is 40 percent, that the company uses the CAPM to estimate its cost of common equity, Ks, that the risk-free rate is 5 percent and the market risk premium is 6 percent. Finally assume that if it has no debt its WACC would be equal to its cost of equity which would be equal to 11 percent (you should now be able to determine its "unlevered beta," bu). 0.10/0.90 0.11 0.20/0.80 0.25 Given this information, determine the firm's cost of capital if it finances with 40 percent debt and 60 percent equity. 0.30/0.70=0.43 0.40/0.600.67 0.50/0.50 = 1.00 Bond Rating AA A A BB B Before-Tax Cost of Debt 7.0% 7.2%…
A company has on its books the following amounts and the specific costs of each type of capital. Market value Types of capital Debts Preference shares Book Value Specific cost % 400000 380000 110000 900000 5. 100000 8. Equity shares 600000 15 Determine the weighted average cost of capital using: (a) Book value weights, and (b) Market value weights
Calculation of individual costs and WACC BlackRock, Inc. (BLK) has a capital structure that consists of common stock equity and debt. The market capitalization of its equity is $76.644 billion and its debt has a market value of $6.797 billion. a. Calculate the market value weights for BLK's capital structure. b. Calculate BLK's cost of equity using a beta of 1.26, a risk-free rate of 0.78%, and a market risk premium of 6.70%. c. Calculate BLK's cost of debt using a bond price of $1,067.77, semi-annual coupon payment of $28.75, and 5 years to maturity. d. Calculate BLK's current WACC using a 21% corporate tax rate. a. The market value weight of long-term debt in BLK's capital structure is %. (Round to two decimal places.)
What is the price per share based on the equity free cash flow model? Year 1: Revenue: 630 Fixed costs: 120 Variable costs: 200 Additional investments in NWC: 10 Additional investments in operating long-term assets: 70 Depreciation: 60 Interest expenses: 35 Newly issued debt: 25 Principal repayment: 15 Cost of equity, Rs: 0.14 Corporate tax rate: 0.40 Growth rate per year: From year 1 through year 5: 0.12 After year 5: 0.05 Market value: Short-term debt: 100 Long-term debt: 600 Common Stock: Market price per share: 18 Number of shares: 100 Select one: a. $16.39 O b. $14.21 O c. $13.09 O d. $15.33 Time left 0:04:22
What%

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