Answer: SEE EXPLANATION
Explanation:
Given the following ;
Values depending on Success
$150M, $135M, $95M, $80M
Risk free rate = 5% = 0.05
Pervebtage to be lost in case of bankruptcy = 25% = 0.25
A.) 0.25 × [( 150 + 135 + 95 + 80) ÷ 1.05] = $109.52 million
Assume a zero-coupon debt with a $100million face value
B.) 0.25 × [( 100 + 100 + (95×0.75) + (80×0.75)) ÷ 1.05] = $78.87 million
C.) Yield to maturity (YTM)
(100M÷78.87M) - 1
1.2679 - 1 = 0.2679 = 26.79%
Expected return = 5%
D.) Equity value
0.25 × [( 150 + 135 + (95×0.75) + (80×0.75)) ÷ 1.05] = $99.11 million
E.) share if no debt is issued
109.52 ÷ 10 = 10.95 per share
F.) Share price if debt of $100M is issued
99.11 ÷ 10 = 9.91 per share
The price differs because bankruptcy cost will Lower the share price.
The pitch....for a sales and marketing item or scam.
Answer:
elastic.
Explanation:
The advertising elasticity of demand measures how sensitive a market and sales are to marketing expenses. Advertising elasticity is calculated by dividing the change in quantity demanded by the percentage change in advertising expenses. Generally products with low advertising elasticity tend to have elastic demands.
Answer:
true
What does MARKET CLEARING mean? ... In economics, market clearing is the process by which, in an economic market, the supply of whatever is traded is equated to the demand, so that there is no leftover supply or demand
there for the answer is true
Sidewinder, Inc., has sales of $686,723, costs of $335,000, depreciation expense of $80,000, interest expense of $45,000, and a
algol13
Answer:
The addition to retained earnings is $95,751.
Explanation:
Addition to the retained earning is the net value of net earning of the year and dividend payment.
Net income
Sales $686,723
Costs (<u>$335,000)</u>
Gross income $351,723
Depreciation Expense <u>($80,000)</u>
Income before interest and tax $271,723
Interest Expense <u>($45,000)</u>
Income before tax $226,723
Tax 22% <u>($49,879)</u>
Net Income <u>$176,844</u>
Addition to Retained Earning = Net Income - Dividend Payment
Addition to Retained Earning = $176,844 - $81,093
Addition to Retained Earning = $95,751
