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zhuklara [117]
3 years ago
15

100 million diluted shares outstanding trading at $37.50 per share. The company has $1 billion of debt outstanding with a cost o

f debt at 6.5% at a marginal tax rate of 40%. The company has $100 million of cash on its balance sheet. What is the enterprise value of Correct Inc.
Business
1 answer:
Pepsi [2]3 years ago
4 0

Answer:

$4,650,000,000

Explanation:

We will use the formula below to calculate the enterprise value of Correct inc.

Enterprise value = Market value capital and debts - Cash and investments

= 100 million diluted shares × 37.50 per share + $1 billion of debt outstanding - $100 million cash

= $3750m + $1000m - $100m

= $4,650,000,000.

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Longhorn Corporation provides low-cost food delivery services to senior citizens. At the end of the year, the company reports th
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Answer:

The income statement, statement of stockholders' equity, and balance sheet for Longhorn Corporation is given below.

<u><em>The income statement</em></u>

Sales Revenue                   $ 67,700

COGS                                 ($ 53,400)

Delivery expenses              ($ 2,600)

Salary expenses                 ($ 5,500)

Net profit                             $ 6,200

<u><em></em></u>

<u><em>Balance Sheet</em></u>

Asset

Cash                                  $ 1,200

Equipment                        $ 29,000

Building                             $ 40,000

Supplies                             $ 3,400

Total Assets                      $ 73,600

Equity

Common Stock                $ 44,000

Retain earning                  $ 24,400

(18,200 + 6,200)

Liability

Account Payable              $ 4,400

Salaries payable                $ 8,00

Total Liabilities                 $ 73,600

<u><em>Statement of Stockholders</em></u>

Opening common Stock           $ 40,000

Addition                                       $  4,000

Closing common Stock              $  44,000

Retain earning Opening            $ 18,200

Net profit                                     $ 6,200

Retain profit Closing                   $ 24,400

Total Equity                                 $ 68,400

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2 years ago
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Answer:

Sell option is preferred.

Explanation:

The decision whether to lease out the machinery that is surplus to requirement or sell outrightly is dependent on the differential analysis performed below.In the analysis I have compared the profits under each option in order to guide the final decision:

Differential analysis as at 7th November(Sale or lease option)                      

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One would have expect that the lease option since it has more revenue to preferable but the costs of repairs,insurance and property taxes were also on the high side

   

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Answer:

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