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
nataly862011 [7]
1 year ago
8

the montana hills co. has expected earnings before interest and taxes of $8,100, an unlevered cost of capital of 11%, and debt w

ith both a book and face value of $12,000. the debt has an annual 8% coupon. the tax rate is 34%. what is the value of the firm? you can assume that the debt is perpetual.
Business
1 answer:
GaryK [48]1 year ago
3 0

The value of the firm is $52,680

calculation of the firm's value

The Montana hills co. has expected earnings before interest and taxes of $8,100

Debt with both a book and face value of $12,000.

Finding the VU is the first step.

VU= [$8,100 ×(1 - .34) ] ÷.11

VU=($8,100×0.66)÷.11

VU=$5,346÷11

VU = $48,600

Let's now determine the firm's value.

VL= $48,600 + (.34 ×$12,000)

VL=$48,600+$4,080

VL= $52,680

Hence, the company's valuation will be $52,680.

Learn more about costing at

brainly.com/question/18597810?referrer=searchResults

#SPJ4

You might be interested in
Budgets that are periodically revised and have new periods added to replace those that have lapsed are called:
Marina86 [1]

Answer:

The correct answer is letter "D": Rolling budgets .

Explanation:

Rolling budgets or budget rollovers are those updated permanently as long as the budget of the previous period is met. These types of budgets are considered extensions of existing budgets but with changes added to reflect the current situation of a company.

5 0
3 years ago
One of your customers is delinquent on his accounts payable balance. You’ve mutually agreed to a repayment schedule of $500 per
inessss [21]

Answer:

Here we need to find the length of an annuity. We know the interest rate, the PV, and the payments. Using the PVA equation:

PVA =C({1 – [1/(1 +r)t]} /r)

$14,500 = $500{[1 – (1/1.0155)t] / 0.0155}

Now we solve for t:

1/1.0155t = 1 − {[($14,500)/($500)](0.0155)}

1/1.0155t= 0.5505

1.0155t= 1/(0.5505) = 1.817

t = ln 1.817 / ln 1.0155 = 38.83 months

<u>Account will be paid off in 38.83 months.</u>

7 0
3 years ago
On cold summer days, beach parking lots are usually almost empty by early morning even though one must pay in order to park ther
Vikki [24]
The only thing I erryy is about tyut is that I love the song and the music that you love and it is so much better then ite was a great night to play with you and your friends that I was in the world and you have to come to the RCA was that you would love using it and I
6 0
3 years ago
What identifies the flow of critical business data
GrogVix [38]

Based on an information management system, Business Continuity Planning identifies the flow of critical business data.

This is because Business continuity planning is a method or strategy that allows the business manager to identify their critical processes.

Business continuity planning establishes operation duration for different activities relating to business continuity, such as outages, contact data, and partners involved in the risk of supporting vital continuity services.

Hence, in this case, it is concluded that the correct answer is "Business Continuity Planning."

Learn more here: brainly.com/question/12068803

3 0
2 years ago
A technique for making an economic comparison of location alternatives is referred to as
zvonat [6]
<span>A technique for making an economic comparison of location alternatives is referred to as locational cost-volume analysis.
This type of an analysis deals with comparing various fixed and variable costs, so as to determine which location has the lowest cost with the help of graphs for each of these locations. There are two methods which you can use to perform this analysis: geographical and mathematical.
</span>
8 0
4 years ago
Other questions:
  • 7. Sharon spent the weekend with her friend Amelia. Amelia proposed a plan for shoplifting CDs from a local music store. Sharon
    14·1 answer
  • Blossom Company has had 4 years of record earnings. Due to this success, the market price of its 370,000 shares of $2 par value
    9·1 answer
  • Eastern University had the following transactions at the beginning of its academic year: Student tuition and fees were billed in
    12·1 answer
  • The purchase of store equipment for cash reduces assets and owner's equity by an equal amount.
    12·1 answer
  • Jeff is a financial advisor. he belongs to two different organizations for financial advisors, and he likes to go to their annua
    12·1 answer
  • Cashland's banking system recently crashed. This eventually led to companies being unable to borrow money to run their businesse
    14·1 answer
  • The Parry Company’s breakeven point in units is 20,000. Assuming that variable costs are 30% and fixed costs are $100,000, what
    11·1 answer
  • Shiffon Electric Group wants to enter the European market via a wholly owned subsidiary where there are already well-established
    10·1 answer
  • The broker has seven different escrow accounts because he wants to maintain good relationships with each of the different banks.
    7·1 answer
  • some technical analysts use fibonacci numbers to predict: market turnarounds. primary trend breakthroughs. resistance and suppor
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!