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mars1129 [50]
3 years ago
9

DAR Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under P

lan I, the company would have 160,000 shares of stock outstanding. Under Plan II, there would be 110,000 shares of stock outstanding and $1.41 million in debt outstanding. The interest rate on the debt is 7 percent and there are no taxes. Use M&M Proposition I to find the price per share. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Share price $ per share What is the value of the firm under each of the two proposed plans? (Do not round intermediate calculations and round your answers to the nearest whole dollar amount, e.g., 32.)
Business
1 answer:
Eddi Din [679]3 years ago
6 0

Answer:

a) Share price of company is $28.20.

b) So value of unlevered firm is $4.512 million.

Explanation:

a.

Share price = Value of debt / (160,000 - 110,000)

= $1,410,000 / 50,000

= $28.20

Share price of company is $28.20.

b.

VAlue of all equity firm = Number of share outstanding × Price per share

= 160,000 × $28.20

= $4.512 million

Value of levered firm is $4.512 million.

Since tax rate is zero, so value of levered firm equal to value of unlevered firm.

So value of unlevered firm is $4.512 million.

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Expansion, peak, contraction, and trough. An expansion is characterized by increasing employment, economic growth, and upward pressure on prices.
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4 years ago
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Minette Company reported net income of $200,000 for the year ended December 31, 2022. During the year, inventories decreased by
musickatia [10]

Answer:

b. $210000.

Explanation:

Calculation for Net cash provided by operating activities in 2022

Using this formula

Net cash=Net income+Inventories- Account payable+ Depreciation expense -Gain on disposal

Let plug in the formula

Net cash=$200,000 + $40,000 − $60,000 + $45,000 −$15,000

Net cash = $210,000

Therefore the Net cash provided by operating activities in 2022 will be $210,000

6 0
3 years ago
Davis Company has analyzed its overhead costs and derived a general formula for their behavior: $65,000 + $14 per direct labor h
Ratling [72]

Answer:

$15.3 per direct labor hour

Explanation:

Overhead costs are those costs which are incurred for the manufacturing of the product but not directly attributable to any product / service. It can be variable or fixed.

Formula for overhead costs = $65,000 + $14 per direct labor hour

Numbers of direct labor hours = 50,000 hours

Total Cost = $65,000 x ($14 x 50,000 ) = $765,000

Over head rate per direct labor hour  = Total overhead cost / Numbers of direct labor hours = $765,000 / 50,000 = $15.3 per direct labor hour

5 0
4 years ago
A manager demonstrates when he listens carefully to his subordinates and works to build trusting relationships.
LUCKY_DIMON [66]

1. Consideration,  2. D- Impoverished Management (1, 1):  E-Task management –Authority compliance (9, 1):  A-Country Club (1, 9):  C- Middle-of-the-Road (5, 5):  B-Team Management (9, 9):

<u>Explanation:</u>

Extent to which leader is sensitive to employees . It is about being sensitive to subordinate's ideas and feelings,  Considerate managers , listen to employee's problems, show appreciation and seek input from subordinates  Initiating Structure - Extent to which a manager is task oriented and working toward goals achievement . Leadership style is of five kinds as per the leadership/managerial grid model

D- Impoverished Management (1, 1):

Managers are low on both the dimensions. Leader is not concerned much about people or job. He does enough to secure job

E-Task management –Authority compliance (9, 1):

Managers are more concerned with task accomplishment and less concerned about people. This style is dictatorial. Leaders believe in efficiency. Because of strict policies and procedures, high attrition rate is there

A-Country Club (1, 9):

Low task and high people orientation.

Leader is people friendly. He is considerate and feels people will work on their own. A low focus on tasks can decrease productivity .

C- Middle-of-the-Road (5, 5):

Compromising position where leader maintains a balance between company needs and the needs of people.

Neither is fully met resulting in average performance.

B-Team Management (9, 9):

Leader believes in empowerment, trust, and consideration towards subordinates as well as focuses on tasks accomplishments

4 0
3 years ago
Finch Manufacturing Company established the following standard price and cost data. Sales price $ 8.90 per unit Variable manufac
lina2011 [118]

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Sales price $ 8.90 per unit Variable manufacturing cost $ 3.60 per unit Fixed manufacturing cost $ 2,500 total Fixed selling and administrative cost $ 1,000 total Finch planned to produce and sell 3,000 units. Actual production and sales amounted to 3,200 units.

1) Contribution format income statement:

Sales= 8,900

Variable costs= 3,600

Contribution margin= 5,300

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Fixed selling and administrative= 1,000

Net operating income= 1,800

2) Flexible budget

Sales= 26,700

Variable costs= 10,800

Contribution margin= 15,900

Fixed costs= 3,500

Net operating income= 12,400

7 0
3 years ago
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