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AVprozaik [17]
3 years ago
10

Best Bagels, Inc. (BB) currently has zero debt. Its earnings before interest and taxes (EBIT) are $130,000, and it is a zero gro

wth company. BB’s current cost of equity is 13%, and its tax rate is 25%. The firm has 30,000 shares of common stock outstanding selling at a price per share of $25.
Refer to the data for Best Bagels, Inc. (BB). Now assume that BB is considering changing from its original capital structure to a new capital structure with 40% debt and 60% equity. This results in a weighted average cost of capital equal to 11.7% and a new value of operations of $833,333. Assume BB raises $333,333 in new debt and purchases T-bills to hold until it makes the stock repurchase. What is the stock price per share immediately after issuing the debt but prior to the repurchase?

a. $20.65
b. $25.00
c. $18.58
d. $27.78
e. $30.19
Business
1 answer:
olga nikolaevna [1]3 years ago
3 0

Answer:

d. $27.78

Explanation:

The computation of the stock price per share is shown below:

= New value of operations ÷ common stock outstanding shares

= $833,333 ÷ 30,000 shares

= $27.78

Simply we divide the new value of operations or the equity value by the common stock outstanding shares so that the correct stock price per share can come

All other information which is given is not relevant. Hence, ignored it

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Answer:

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Explanation:

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2 years ago
Tarrant Corporation was organized this year to operate a financial consulting business. The charter authorized the following sto
algol [13]

Answer:

Find the requirement below:

1. Prepare the journal entries required to record the sale of common stock in (a) and (b). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

2. Prepare the stockholders’ equity section as it should be reported on the year-end balance sheet. (Amounts to be deducted should be indicated by a minus sign.)

First issue of shares:

Dr   Cash     $197,200

Cr Common stock                           $98,600

Cr Paid-in capital in excess of par  $98,600

Second  issue of shares:

Dr   Cash     $85,800

Cr Common stock                           $37,400

Cr Paid-in capital in excess of par  $48,400

Shareholders equity section:

Common stock ($98,600+$37,400)                $136,000

Paid in capital ($98,600+$48,400)                  $147,000

Retained earnings                                              $7,300

Total shareholders' equity                                 $290,300

Explanation:

First issue of shares:

cash proceeds 5,800*$34=$197,200.00  

split into    common stock  $17*5,800=$98,600.00  

                 paid-in capital in excess of par ($197,200-$98,600)= $98,600.00  

second  issue of shares:

cash proceeds 2,200*$39=$ 85,800.00  

split into    common stock  $17*2200=$ 37,400.00  

                 paid-in capital in excess of par ($85,800-$37,400)= $48,400.00  

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Charles and nancy have decided to sell their family business and would like to transfer ownership to the next generation. which
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The best method to make money would be the best

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The price of a complementary good changes. __________ Demand shifts Movement along demand Incomes in the economy​ change; the go
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NOTE: Your question isn't clear, Johnson. Would you mind checking it and writing it in a way you can be better helped?

Meanwhile, I hope these explanation below helps.

Answer and Explanation:

Two goods are said to be complementary goods if an increase in the price of a particular one leads to a commensurate decrease in the demand that buyers placed for the other one.

A good is said to be a normal good if the reason for an increase in demand is due to an increase in the income of the buyers.

A good is said to be an inferior good if there is a decrease in demand even though the buyers have experienced increase in their income.

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3 years ago
Cake is a product of the Chester company which is primarily sold in the Americas Budget segment. Chester starts to create their
alekssr [168]

Answer:

Cake demand next year=1,267,498 units

Explanation:

Y=I+G

where;

Y=cake demand next year

I=initial demand

G=growth demand

Meaning;

Cake demand next year=Initial demand+growth demand

where;

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growth demand=5% of initial demand

growth demand=(5/100)×1,207,141=60,357.05 units

replacing;

Cake demand next year=1,207,141+60,357.05=1,267,498.05

Cake demand next year=1,267,498.05 units rounded off to the nearest unit=1,267,498 units

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