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fomenos
3 years ago
11

Dinklage Corp. has 6 million shares of common stock outstanding. The current share price is $72, and the book value per share is

$7. The company also has two bond issues outstanding. The first bond issue has a face value of $70 million, a coupon of 7 percent, and sells for 97 percent of par. The second issue has a face value of $50 million, a coupon of 8 percent, and sells for 106 percent of par. The first issue matures in 22 years, the second in 6 years.
a.
What are the company's capital structure weights on a book value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)

Equity/Value
Debt/Value
Business
1 answer:
lawyer [7]3 years ago
4 0

Answer:

The book value per share is $7 and there are a total of 6 million shares which means in order to find the equity value of the company we need to multiply the book value per share and the total number of shares.

So the value of equity is $42 million

The debt of the company is 70 million plus 50 million = $120 million

The total capital of the company is 120 million plus 42 million = $162 million

The Equity/Value = 42/162=0.2592=25.92%

The Debt/Value= 120/162=0.7407= 74.07%

Explanation:

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arlik [135]
Given:
n = 4000, sample size
p = 16% = 0.16, the proportionof theose who watch60 minnures.
Confidence interval (CI) = 95%

The z* parameter is 1.96 for 95% CI, so the confidence interval is
p \pm z* \sqrt{ \frac{p(1-p)}{n} }
That is
0.16 +/- 1.96*√[(0.16*0.81)/4000]
= 0.16 +/- 0.114
= (0.1486, 0.1714)

Answer:
The 95% confidence interval is approximately (15%, 17%) or 15% ≤ p ≤ 17%.

Note:
To correct for the fact that we are using a discrete distribution to match a continuous distribution, it is customary to subtract 0.5/n from the lower limit and to add it to the upper limit.
If this correction is applied, the 95% confidence interval becomes
(0.1486-0.5/4000, 0.1714+0.5/4000)
= (0.1485, 0.1715)
or
15% ≤ p ≤ 17%
The correction does not affect the result in a significant way.

7 0
3 years ago
when signing a lease for a retail space, it's important to make sure the lease has a clause, which releases the tenant from the
saul85 [17]

Make sure the lease has a bail-out clause that releases the tenant from the lease if sales fall short of a predetermined level before signing it for a retail space.

<h3>What is a bailout? What are the justifications for bailing out companies?</h3>

Giving financial capital to a business that is perilously near to bankruptcy is known in finance as a bail-out. The bailout's objective is to keep the business from going bankrupt. The phrase can also be used to refer to rescuing seriously troubled nations.

Profit is occasionally a driving force behind bailouts. For instance, if they purchase the extremely discounted shares of a failing company, investors may sense an opportunity. However, it's possible that the objective is charitable. An unsuccessful company may be revived by philanthropists and transformed into a non-profit entity.

Governments occasionally provide financial assistance to struggling companies. Governments will step in, for instance, if a company's failure could hurt the economy at large.

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4 0
2 years ago
​Wellness, a healthy living​ magazine, collected in subscription revenue on May 31. Each subscriber will receive an issue of the
PIT_PIT [208]

Answer: $220,000

Explanation:

Using the Accrual Method of Accounting means that revenue is only to be recorded when it is earned i.e. when services have been delivered.

Any revenue received when the services have not been delivered will be recorded as Unearned Revenue.

With $528,000 in subscription revenue, the monthly subscription is;

= 528,000/12

= $44,000

From June to December would be 7 months so they would have earned;

= 44,000 * 7

= $308,000

The amount that they have not earned but have received would therefore be;

= 528,000 - 308,000

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<em>This amount will be recorded after they finish deliveries of magazines in next year May. </em>

7 0
3 years ago
Describes the practice of products and services traded between counties around the world
mylen [45]

Global Trade, or commerce, involves the transfer of the ownership of goods or services, from one person or entity to another, in exchange for money goods or services. Help to Grow the Society.


4 0
3 years ago
What is the relationship between changes in the money supply and changes in the reserve requirement
EastWind [94]

Answer:

Reserve requirements have an indirect relationship with the money supply

Explanation:

Reserve requirements are a portion of customer deposits a  bank is supposed to keep in its custody at all times. The federal reserve gives guidance on the proposition of reserve requirement that a bank should hold. Reserve requirement is usually a percentage of the deposits. Banks cannot loan out their reserves.

Reserve requirements have an inverse relationship with the money supply in the economy. If the reserve requirement is high, banks will have a lower proposition of customer deposits to loan out. When reserve requirement is low, banks will have a bigger proposition of deposits to loan out, thereby increasing the money supply in the economy.

3 0
4 years ago
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