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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:

57 smartphones per day

Explanation:

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total daily fixed costs = $684

break even point in units = total fixed costs / contribution margin per unit = $684 / $12 = 57 smartphones per day

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BabaBlast [244]
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3 years ago
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andreyandreev [35.5K]

Answer:

Consider the following explanation

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A major well known Business - Apple - It should invest more in its emerging economies customer care. Many people in EMs are scared o buying an apple product because of the pathetic service it provides in these markets. This would really help Apple in pushing its sales and compete with EM brands like Mi. This project will correct Apple's Error of Omission in the Emerging markets sales impetus.

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