Answer:
a. NAV = 8 per share
b. 250.000 shares
c. 7.95
Explanation:
a. NAV = Market value of shares/number of shares = $8m/1m = $8 per share
b. At the current NAV, it can absorb up to $2 million, or 250,000 shares.
c-1. Its loss by selling 25,000 shares of IBM at $34 instead of $36 = -$2 x 25,000 = -$50,000.
New NAV = $7,950,000 /1m = $7.95
Answer:
The value of Ted stock is $2.43
Explanation:
Free cash flow From Year 1 to 5 = $200000
Cash Flow Year 6 = 200000*1.05
= $210000
This cash flow is expected to grow forever, so the terminal value can be caluclated at Year 5 of the above perptuity by Gordon Growth model
Terminal Cash FLow Value at Year 5 = 210000/(15% - 5%)
= $2100000
Present Value of above stream
= 200000*PVIFA(5 yr, 15%) + 2100000*PVIF(5 yr, 15%)
= $200000*3.352 + $2100000*0.497
= $1714100
Value of equity = Present Value of Firm - Value of debt
= $1714100 - $500000
= $1214100
Number of shares = 500000
Value per share = $1214100/500000
= $2.43
Therefore, The value of Ted stock is $2.43
Answer: 18.8%
Explanation:
Simple rate of return on investment = Incremental net operating income / investment
Incremental net income = Operating savings - Annual cost
= 145,000 - 420,000/6 years
= $75,000
Net investment = Cost of new machine - salvage value of old
= 420,000 - 21,000
= $399,000
Return on investment = 75,000/399,000
= 18.8%
Answer:
C) Business marketing
Explanation:
There are two major types of business transactions: business to business (B2B) and business to consumers (B2C).
When a company engages in B2B transactions, they are selling their products or services to another business or individual that will resell them to individual consumers. For example, Nike sells shoes to Foot Locker, and then Foot Locker resells them to final consumers.
Businesses engaged in B2B transactions use specific marketing strategies aimed at their wholesale clients which usually vary from marketing strategies aimed at final consumers, e.g. offer discounts for buying in bulk.
