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Furkat [3]
3 years ago
5

5. Ren Inc. has expected earnings before interest and taxes of $63,300, an unlevered cost of capital of 14.7 percent, and a comb

ined tax rate of 23 percent. The company also has $11,000 of debt that carries a coupon rate of 7 percent. The debt is selling at par value. What is the value of this company?
Business
1 answer:
laila [671]3 years ago
5 0

Answer:

$334,101.43

Explanation:

The computation of the value of this company is shown below:

Value of unlevered firm= [$63,300 × (1 - 23%)] ÷ 14.7%

= $331,571.43

And,

Value of this company = 331,571.43 + 23% of $11,000

= $331,571.43 + $2,530

= $334,101.43

As we know that value of the company is the mix o f levered firm and the unlevered firm according to that we done the calculations

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The answer is:

Total loss to the left of the intersection

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5 0
3 years ago
As a result of the growing trade with the Europeans, the Woodland Indians gradually abandoned their culturally based system of t
puteri [66]

Answer: True

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This changed after they met the Europeans and they gradually began to seize land and establish trade centres.

3 0
3 years ago
The theory of mercantilism states that a country’s power depends mainly on its wealth. During the Age of Exploration, this meant
aleksklad [387]

Answer:

A positive balance of trade

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I hope my answer helps you

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