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Naddika [18.5K]
3 years ago
10

Ashley Inc.’s total value is $950 million. Its balance sheet shows $100 million of accounts payable, $100 million of notes payab

le, $200 million of long-term debt, and $200 million of common equity. Ashley has no preferred stock. Assume Ashley has 100 million shares of common stock, what is the best estimate for the Ashley’s stock price?
Business
1 answer:
PIT_PIT [208]3 years ago
5 0

Answer: $7.50

Explanation:

Given that,

Total value = $950 million

Accounts payable = $100 million

Notes payable = $100 million

Long-term debt = $200 million

common equity = $200 million

shares of common stock = 100 million

Value of equity = Value of firm - Value of preferred stock - Value of long term debt.

                         = $950 million - 0 - $200 million

                         = $750 million

Value\ of\ stock = \frac{Value\ of\ equity}{Number\ of\ shares}

Value\ of\ stock = \frac{750}{100}

                                 = $7.50

                     

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It false that the causes of a problem can always possible to identify completely.

<h3>What is problem solving?</h3>

This is defined as the process of finding solution to a task that seems difficult. It is a skill, hence applied after a problem has been identified.

Hence, It false that the causes of a problem can always possible to identify completely.

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8 0
2 years ago
Up in Smoke Tobacco Shops' bond carries a 9 percent coupon, pays interest semiannually, and has 10 years to maturity. What is th
lara [203]

Answer:

10%

Explanation:

Since the bond is selling at a discount, it means that the coupon rate is blow the market rate, so the actual rate must be higher. Since there is only one option with an interest rate above 9%, we must check to see if it works.

10% yearly interest rate = 5% semiannual interest rate

we must determine the PV of the 20 coupons paid and the face value at maturity.

to calculate the PV of the 20 coupons ($45 each) we can use an excel spreadsheet and the NPV function with a 5% discount rate: PV of the coupons = $560.80

the PV of the face value in 10 years = $1,000 / 1.05²⁰ = $376.89

the present value of the coupons and the bond at maturity = $560.80 + $376.89 = $937.69. The PV using a 5% semiannual rate is very similar to $937.75, and since the question asked us to round up to the nearest whole percent, we can assume it is correct.

6 0
3 years ago
A company's plan for the acquisition of long-lived assets, such as buildings and equipment, is commonly called a:
goblinko [34]

A company's plan for the acquisition of long-lived assets, such as buildings and equipment, is commonly called a Capital Budget.

<h3>What is a Capital Budget?</h3>
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  • Before a project is accepted or denied, capital budgeting is necessary. Examples of such projects include the construction of a new plant or a significant investment in a third-party enterprise.
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7 0
1 year ago
The financial statements of the Pharoah Company report net sales of $372000 and accounts receivable of $56400 and $27600 at the
snow_lady [41]

Answer:

the average collection period for accounts receivables is 41.2 days

Explanation:

Average Collection Period measures the amount of time it takes to collect credit from accounts owing.

Average Collection Period = Average Accounts Receivables / (Sales/365)

                                            =(($27600+ $56400)/2) / ( $372000/365)

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                                            = 41.20967742

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8 0
3 years ago
Read 2 more answers
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lys-0071 [83]

Answer:

The current price of the stock is $68.42

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Present value or current price of the stock = $68.42

6 0
3 years ago
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