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Mademuasel [1]
3 years ago
15

Refer to the data for Pennewell Publishing Inc. (PP). Assume that PP is considering changing from its original capital structure

to a new capital structure with 35% debt and 65% equity. This results in a weighted average cost of capital equal to 9.4% and a new value of operations of $510,638. Assume PP raises $178,723 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?
Business
1 answer:
Mnenie [13.5K]3 years ago
6 0

Answer:

$57.69 per share

Explanation:

The computation of the  stock price per share immediately after issuing the debt but prior to the repurchase is shown below

Price per share = Value of equity ÷ number of Shares

where,

Value of equity is

= Value of operations + T-bills value - Debt value

= $576,923 + $259,615 - $259,615

= $576,923

And, the number of shares is 10,000 shares

So, the price per share is

= $576,923 ÷ 10,000 shares

= $57.69 per share

We simply applied the above formula

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Unidice, an information technology firm, recently installed a new data system that provides seamless access to data. This data s
IceJOKER [234]

Answer:

first-mover advantage

Explanation:

First-mover advantage refers to the strategic advantage achieved by the first company that occupies a market segment. In order for a company to gain first-mover advantage it must be the first company to enter a market or at least be the first company to gain competitive advantage in that market.

Unidice is the first company to gain competitive advantage in the data system market because its processing speed is much higher than its competitors.

Sometimes you don't need to be the first one to enter a market, but you need to be the first one to do things right. For example, Microsoft introduced the Surface tablet almost a decade before Apple introduced the iPad, but Apple did it right, therefore Apple gained first mover advantage.

6 0
3 years ago
You are planning to save for retirement over the next 30 years. To do this, you will invest $750 per month in a stock account an
Nikolay [14]

Answer:

Ans. Assuming that the withdrawal period is 300 months (25 years), you can withdraw every month $15,547.96

Explanation:

Hi, first, we have to take to future value (30 years in the future) the invested capital (both the stock account and the bond account). From there, we will consider the sum of both future values as the present value of the annuity that you are about to receive for the next 25 years (300 months). But before we do all that, we need to convert the return rates (compounded monthly) into effective monthly rates, for that we just go ahead and divide each one by 12, as follows

r(Stock) = 0.105/12= 0.00875

r(Bond)= 0.061/12 = 0.00508

r(Combined Account)= 0.069/12=0.00575

Now we are ready, first, let´s find the future value of the stock account.

FV(stock)=\frac{750((1+0.00875)^{360}-1) }{0.00875} =1,887,300.74}

Now, let´s find out how much will it be in 30 years, investing $325 per month, at the end of the month, at 0.508% effective monthly.

FV(Bond)=\frac{325((1+0.00508)^{360}-1) }{0.00508} =332,526.95

And then we add them up and we get:

FV(stock)+FV(bond)=1,887,300.74+332,526.95=2,219,827.69

Ok, now let´s find the annuity (monthly withdraw) taking into account that we are going to make 300 withdraws at a rate of 0.575% effective monthly,

[tex]2,219,827.69=A(142.7729593)

\frac{2,219,827.69}{142.7729593} =A

A=15,547.96\frac{A((1+0.00575)^{300}-1) }{0.00575(1+0.00575)^{300} }[/tex]

Best of luck.

5 0
3 years ago
Sometimes employers discover evidence of employee ___ after someone has sued them for discrimination. Employers may try to use t
EastWind [94]

Answer:

The answers are,

1st Blank - a. harassment

2nd Blank - f. avoid

3rd Blank - e. limit

Explanation:

Harassment can come in many forms in a n organization, they could be sexual harassment, verbal harassment, power harassment, gender discrimination, etc. Legal actions can be taken against an employer for not enforcing necessary requirements to prevent them.

Such lawsuits cannot be avoided by the employers but through legal means they can seek to mitigate or limit the damages they have to pay to the affected employee.

5 0
3 years ago
A disadvantage of adding a salad bar to a school lunch menu would be ?
bearhunter [10]
The cost of adding more options. Supply and demand: would the students want to have salad for lunch, or would it go to waste?
5 0
3 years ago
Read 2 more answers
Suppose you transfer $500 from your checking account to your savings account. With this transaction, M1 _________ and M2________
Luba_88 [7]
Decreased; stayed the same
4 0
2 years ago
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