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DaniilM [7]
3 years ago
14

Suppose Tefco Corp. has a value of ​$100100 million if it continues to​ operate, but has outstanding debt of ​$120120 million th

at is now due. If the firm declares​ bankruptcy, bankruptcy costs will equal ​$2020 ​million, and the remaining ​$8080 million will go to creditors. Instead of declaring​ bankruptcy, management proposes to exchange the​ firm's debt for a fraction of its equity in a workout. What is the minimum fraction of the​ firm's equity that management would need to offer to creditors for the workout to be​ successful?
Business
1 answer:
bazaltina [42]3 years ago
4 0

Answer:

The minimum fraction is 80%

Explanation:

Creditors receive 80 million in bankruptcy since if there is bankruptcy, the bankruptcy cost is $20m while the other $80m is received by creditors, so they need to receive at least this much. Therefore, the minimum fraction of the​ firm's equity that management would need to offer to creditors for the workout to be​ successful is 80%. Tefco could offer its creditors 80% of the firm in a workout.

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________ is the extent to which a firm's internal activities encompass one, some, many, or all activities that make up an indust
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Answer:

BE Scoping strategy CC Horizontal scope D.A)Horizontal installation.

6 0
3 years ago
Agent fred fronts his cousin norm money to buy a client's house. shortly after the closing, agent fred flips the house and reali
VashaNatasha [74]
<span>This is the situation or case of real estate dealing in which Agent fred fronts his cousin norm money to buy a client's house. shortly after the closing, agent fred flips the house and realizes a substantial profit. agent fred's actions might be describe as Self-dealing.
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3 0
3 years ago
The liabilities of Berber Company are $120,000 and the owner's equity is $230,000. What is the amount of Berber Company's total
svetlana [45]

Answer:

$350,000

Explanation:

The relationship between assets, liabilities, and equity is expressed in the accounting equation.  According to the equation, Assets = Equity plus Liabilities.

For Berber company, total assets will be

Assets = $120,000 + $230,000

Assets = $350,000

6 0
3 years ago
The difference between the total actual cost incurred and the total standard cost is called the:
nlexa [21]

The variance is the  difference between the total actual cost incurred and the total standard cost.

<h3>What is variance in accounting?</h3>

In the field of accounting, the variance is simply referred to as the difference that exists between the forecasted amount and the actual amount.

Therefore from the definition that we have above the answer to this question is variance.

Read more on variance here: brainly.com/question/15858152

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3 0
1 year ago
babysits on the weekends for extra money. Suppose that three neighbors with children are interested in paying Elizabeth to babys
kolbaska11 [484]

Answer:

$15

Explanation:

Consumer surplus is the price the consumer pay for good/service minus the amount the consumer is willing to pay for it.

✓Mr. and Dr. Brown would be willing to pay ​$31

✓Mr. Smith would be willing to pay ​$28

✓Professor Jones and Mr. Jones would be willing to pay ​$22

Elizabeth PRICE for babysitting each set of children for an evening = $22

Consumer surplus= Σ (price that the consumer is willing to pay- Price of the good/service is sold)

= [(31-22)+(28-22)+(22-22)]

= 9+6+0

=$15

Hence, Consumer surplus is $15

8 0
3 years ago
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