See Chapter 19, sections 19.9 and Cases. The project will be a continuation of how to improve the process you chose in Competenc
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Answer:
The value of the difference between the earnings per share (EPS) forecasts for Feast and Famine is $2.40
Explanation:
The solution is as evident in the attached Excel Sheet. In the excel sheet the formulas are used which are also given in the second sheet.
For the data values from the question are used.
Answer:
a) $337,615.38
b-1) $360,910.85
b-2) $415,266.92
c-1) $362,637.36
c-2) $438,461.54
Explanation:
a) To find the current value of the company, we have:
=
= $337,615.38
b-1) If the company takes on debt equal to 30 percent of its unlevered value.
337,615.38 + (0.23 * 337,615.38 * 0.30)
= $360,910.85
b-2) When the company can borrow at 10 percent. The value of the firm if the company takes on debt equal to 100 percent of its unlevered value will be:
337,615.38 + (0.23 * 337,615.38 * 1)
= $415,266.92
c-1) The value of the firm if the company takes on debt equal to 30 percent of its levered value:
= $362,637.36
c-2) The value of the firm if the company takes on debt equal to 100 percent of its levered value:
= $438,461.54