1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
neonofarm [45]
2 years ago
15

Jericho Snacks is an all-equity firm with estimated earnings before interest and taxes of $624,000 annually forever. Currently,

the firm has no debt but is considering borrowing $725,000 at 6.75 percent interest. The tax rate is 25 percent and the current cost of equity is 15.2 percent. What is the value of the levered firm
Business
1 answer:
vova2212 [387]2 years ago
4 0

Value of levered firm is $2,922,171.

<h3><u>What is Finance?</u></h3>
  • The term "finance" refers to issues including the development, management, and study of money and investments. It entails employing future income flows to finance current initiatives through the use of credit and debt, securities, and investment.
  • Finance is strongly tied to the time value of money, interest rates, and other related topics because of its temporal component.
  • There are numerous further specialized classifications, such as behavioral finance, which aims to pinpoint the cognitive (e.g., emotional, social, and psychological) drivers of financial decisions.
  • Typically, "finance" is divided into three major categories: Taxation systems, government spending, budgeting practices, stabilization tools and policies, debt problems, and other governmental difficulties are all considered to be a part of public finance.
  • Managing a company's assets, liabilities, revenues, and debts is part of corporate finance.

VU = [$624,000 ×(1 -.35)]/.152 = $2,668,421.05

The Value of the levered Firm is:

VL = $2,668,421.05 + (.35 ×$725,000) = $2,922,171

Know more about Finance with the help of the given link:

brainly.com/question/26168077

#SPJ4

You might be interested in
. According to the path-goal theory of leadership, which of the following leadership styles stresses high-quality performance an
const2013 [10]

Answer:

The correct answer to the following question will be Option C (Achievement-oriented leadership).

Explanation:

  • The Path-Goal model is indeed a concept based on clarifying the style or activity of a leader that best suits the individual and the working conditions to reach a goal
  • The achievement-oriented leader approach applies to circumstances in which the leader sets demanding workplace goals, requires them to operate at their highest possible level, and expresses control over their own lives to fulfill those standards.

Therefore, Option C is the right answer.

4 0
3 years ago
Mayo Corp. has estimated that total depreciation expense for the year ending December 31, 2021 will amount to $600,000, and that
Mariulka [41]

Answer:

$900,000

Explanation:

Depreciation for the year      $600,000

Employee Bonuses              $1,200,000

Total expense for the year    $1,800,000

Expense to be reported in interim income statement 1,800,000/2=$900,000

5 0
3 years ago
On January 1, 2017, Hannigan Company issued bonds with a face value of $600,000. The bonds carry a stated interest of 7% payable
mart [117]

Answer:

Explanation:

The journal entries are shown below:

Cash A/c Dr $582,000            ($600,000 × 0.97)

Discount on Bonds Payable A/c Dr $18,000

       To Bonds payable A/c    $600,000

(Being the issuance of the bond is recorded and the remaining balance is debited to the discount on bond payable account)

Cash A/c Dr $612,000            ($600,000 × 1.02)

       To Bonds payable A/c    $600,000

       To Premium on bonds payable A/c $12,000

(Being the issuance of the bond is recorded and the remaining balance is credited to the premium on bond payable account)

6 0
3 years ago
A company's weekly payroll amounts to $50,000 and payday for the week is every friday. employees work five days per week, monday
salantis [7]

The total payroll amount is $50,000 per week.

Since there are only 5 work days per week (Monday to Friday), therefore the employees wage per day is:

Employees wage per day = $50,000 / 5 = $10,000

For the payday on April 4, the wages expense covered for this would be from April 1 to April 4 since the accounting period ended on March 31. Therefore wages expense in the journal entry would be calculated using 4 days.

Wages expense for April for the payday April 4 = Employees wage per day * Number of days

Wages expense for April for the payday April 4 = $10,000 * 4

<span>Wages expense for April for the payday April 4 = $40,000</span>

7 0
2 years ago
Which of the following is an example of an equity investment?
Blizzard [7]

Answer:

A company's stock

Explanation:

There are two main capital structure i.e. debt and the equity. The debt is the loan which is to be borrowed by the individual or a company in order to raise a capital. While the other one is equity in which it shows the ownership stake in the company also it involves the securities than should be traded in the stock markets

While going through the options given, the second option is correct as other options are the examples of debt and the same is not considered for an equity investment

5 0
3 years ago
Other questions:
  • What is the most important duty of a firm's financial officer? to ensure that the firm has enough cash on hand to meet its commi
    8·1 answer
  • At the end of the current year, Accounts Receivable has a balance of $2,150,000; Allowance for Doubtful Accounts has a debit bal
    10·1 answer
  • After a deduction for dental insurance was taken out, mike's annual net income went from $65,150 to $65,000. if mike pays 25% of
    14·1 answer
  • Recommend and describe three (3) different ideas to advertise the office to the general public for Healthcare Community Office.
    13·2 answers
  • Samuelson has a beginning inventory balance on January 1 of 12,000 units and desires an ending balance of 20% of the next month’
    13·2 answers
  • Exercise 16-05 a-b (Video) In Waterway Company, materials are entered at the beginning of each process. Work in process inventor
    13·1 answer
  • AB When considering two mutually exclusive projects, the firm should always select the project whose internal rate of return is
    13·2 answers
  • Finerly Corporation sells cosmetics through a network of independent distributors. Finerly shipped cosmetics to its distributors
    5·1 answer
  • When using the interval recording method, regardless of the number of responses, if the behavior occurs in a given segment, the
    6·1 answer
  • 22. Preferred stockholders hold a claim on assets that has priority over the claims of A) both common stockholders and bondholde
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!