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pochemuha
3 years ago
6

White Lion Homebuilders is considering investing in a one-year project that requires an initial investment of $500, 000. To do s

o, it will have issue new common stock and will incur a flotation cost of 2.00%. At the end of the year, the project is expected to produce a cash inflow of $595, 000. The rate of return that White Lion expects to earn on its project (net of its flotation costs) is _________ (rounded to two decimal places).
Alpha Moose Transporters has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $2.45 at the end of next year. The company's earnings' and dividends' growth rate are expected to grow at the constant rate of 9.40% into the foreseeable future. If Alpha Moose expects to incur flotation costs of 6.50% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common stock (rounded to two decimal places) should be _________.

White Lion Homebuilders Co.'s addition to earnings for this year is expected to be $745, 000. Its target capital structure consists of 35% debt, 5% preferred, and 60% equity.

Determine White Lion Homebuilders's retained earnings breakpoint:

a. $1, 552, 084

b. $1, 117, 500

c. $1, 241, 667

d. $1, 427, 917
Business
1 answer:
MissTica3 years ago
4 0

Answer:

C.

Explanation:

a) Required around for investment is $500,000

Flotation cost is 2%

Total amount require to issue =

$500,000/ (1-2%)

= $510,204,08

After one year value of investment will be $595,000

Rate of return =

550000/(450000x(1+2%)-1 =19.8%

b) 2.03/(33.35x(1-3.75%) + 9.4 = 15.72%

c) 745000/60% = 1241666.67

That is C. $124,1666,67

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The restriction on the building to prevent sale to persons of a particular race means it is unenforcable but the sale can go through.

Restrictions like this are unconstitutional because it is promotes discrimination of some race.

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3 years ago
You created a financial model for a pitchbook being presented tomorrow to a potential new client. While reviewing the final vers
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A pitchbook is confidential document. It is basically a sales document, used by the sales force, which contains main features or attributes of the firm, the potential of the firm and the future aspects of the firm in detail.

So keeping the given question in mind, I would write to my supervisor as follows:

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dar Grove Industries produces and sells a cell phone-operated home security control. Information regarding the costs and sales o
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Answer:

.................................................................................................

Particulars                              Unit cost       Amount

Sales income                         $ 47            $ 376,000      

Less: Variable cost                $ 24           $ 192,000

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Contribution Margin             $ 13           $ 184,000

Less: Fixed cost                                        $ 124,000

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Net income                                                $ 60,000

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Given:

Unit selling price = $ 47

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Sales income                         $ 47            $ 376,000      

Less: Variable cost                $ 24           $ 192,000

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Contribution Margin             $ 13           $ 184,000

Less: Fixed cost                                        $ 124,000

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Net income                                               $ 60,000

...................................................................................................

here, the amount is for the total unit i.e 8000 units multiplied by the unit cost

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