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kifflom [539]
3 years ago
9

The free cash flow to the firm is reported as $205 million. The interest expense to the firm is $22 million. If the tax rate is

35% and the net debt of the firm increased by $25, what is the market value of the firm if the FCFE grows at 2% and the cost of equity is 11%?a. $2,168 billionb. $2,397 billionc. $2,565 billiond. $2,998 billion
Business
1 answer:
Sergeu [11.5K]3 years ago
4 0

Answer:

The correct answer is $2,444.6 billion

Explanation:

FCFE= FCF+ Increase in debt- Interest (1-t)

        =  $205+$25-$22( 1-0.35)

        =$215.7

Market Value = [(215.7)1.02)]/ [11%-2%]

                      =$2,444.6

Assuming a single period growth rate of 2%,

the forecasted FCFE =$215.7(1+0.02)

                                  =$220.01 billion

Although this is not available in the options provided ,$220.01 billion is the correct answer.

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Company X had net income of $200,000 in the year 2016. At the beginning of 2016, there were 500,000 shares of outstanding common
EleoNora [17]

Answer:

Basic earning per share $0.21 per share

Explanation:

Basic Earning per share = ( Net Income - Preferred stock dividend ) / Weighted Average outstanding shares

Basic Earning per share = ( $200,000 - $50,000 ) / 700,000

Basic Earning per share = $150,000 / 700,000

Basic Earning per share = $0.2143 / share

Weighted average Outstanding shares = 500,000 + 200,000

Weighted average Outstanding shares = 700,000 shares

5 0
3 years ago
If you followed Taguchi’s principles, and you wanted to investigate a design with 5 factors at 2 levels, how many experiments
Musya8 [376]

Answer:

Number of full factorial experiments needed as per classical statistics is 5

Explanation:

We can use the following method to solve the given problem

Number of experiments needed as per Taguchi's principles:

No. of factors, F= 5

No. of levels, L = 2

No. of experiments, E = 1 + F*(L-1)

= 1 + 5*(2-1) = 1 + 5*1 = 6

Number of full factorial experiments needed as per classical statistics:

E = L^F

= 2^5

= 32

5 0
3 years ago
Rachel Praia opened a business. Record the transactions for the first month of operations.
RSB [31]

Answer:

you didn't tell us the whole question.

Explanation:

what I would do is add up all the transactions and go with that.

3 0
3 years ago
According to economists, when two people make the exactly opposite decision:
disa [49]

Answer:

b. each person evaluates the situation according to his/her individual self-interest.

Explanation:

This can be generally seen in ancient and modern form of economics where in the course of their works, they can end up countering themselves in the midst of a project.

Here, or in a case of such, a great part of economics deals and accommodates psychology an the both economics that have probably found themselves in the field are expected to evaluate the situation according to each others self interest; especially when knowing the risks, pros and negative effect of the activities that is been carried out.

Secondly, this model is a useful measurement device by which economic situations can be evaluated and also levels of competition that exist in real markets can be checked.

6 0
4 years ago
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nexus9112 [7]

Answer:

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3 0
4 years ago
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