For each transition matrix P in Problems 23-30, solve the equation S P = S to find the stationary matrix S and line limiting matrix P ¯ . P = .5 .1 .4 .3 .7 0 0 .6 .4
For each transition matrix P in Problems 23-30, solve the equation S P = S to find the stationary matrix S and line limiting matrix P ¯ . P = .5 .1 .4 .3 .7 0 0 .6 .4
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provide step by step solution for the following questions.
All computations must be done and shown in detail. Report numerical results up to 4 places after the decimal.
queston 1.
Summer-Seas Limited operates out of Miami Florida USA. Its current earnings before interest and tax are $950,000. Earnings are projected to remain constant over the foreseeable future. Summer-Seas currently has no debt, but if it choose to borrow, its cost of borrowing would be seven percent.
Summer-Seas has an unlevered cost of 11 percent, while its tax rate is 20 percent.
If Summer-Seas adds leverage to the company by borrowing $350,000, what will be its WACC be after recapitalization? Kindly show all workings and formulae used.
question 2.
Ordinary Craft Inc.(OC) is currently an unlevered firm with 450,000 shares of stock outstanding, with a market price of $15 a share. The company has earnings before interest and taxes of $314,000. OC met with its bankers, Smartly-Solvent Incorporated (SS),…
Chapter 9 Solutions
Finite Mathematics for Business, Economics, Life Sciences, and Social Sciences (14th Edition)
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