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ira [324]
3 years ago
8

A firm is considering financing its $20 million dollars of assets with one of two plans. Plan A consists of $3 million of debt w

ith an interest rate of 6.6%, and 1.7 million shares of common stock. Plan B consists of $10 million dollars in debt with an interest rate of 7.2%, and 1 million shares of common stock. The firm’s tax rate is 30%. Calculate the EBIT-EPS breakeven point, and then calculate the earnings per share at this level of EBIT.

Business
1 answer:
skad [1K]3 years ago
3 0

Answer:

Please see attachment

Explanation:

Please see attachment

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True or false. Unemployment compensation is generally unavailable for people who quite a job without good cause
Delicious77 [7]

Answer:

true;  unemployment compensation is generally unavailable for people who quite a job without good cause

Explanation:

6 0
2 years ago
ABC Co. has 165 million shares outstanding and expects earnings at the end of this year of $2.05 billion. ABC plans to pay out 4
frosja888 [35]

Answer:

Share price = $85.684

Explanation:

It is given that  ,Ke = cost of equity = 15% ,g = Growth = 9.2%%  and Dividend and Repurchase = 40%

Now we know that

PV = CF /(Ke- g)

PV = $2.05 billion*0.4 / (0.15-0.092) = 0.84 billion /0.058

=$14137931034.483

Share price = $14137931034.483 / 165000000 million

Share price = $85.684

8 0
3 years ago
Project A as well as project B require an initial investment of $1,050,000, have a 6-year life, and have expected total cash inf
miss Akunina [59]

Answer:

Proposal A

3.75 years

Proposal B

3.375 years

Explanation:

<u>Proposal A</u>

Payback = 3.75 years

Year     Cash Inflow      Initial Investment Balance   Year Count

0                   0                         1,050,000                        

1                   $280,000           770,000                            1

2                  $280,000           490,000                           2

3                  $280,000           210,000                            3

4                  $280,000           0                                    *3.75

* 1050,0000 / 280,000 = 3.75 years

<u>Proposal B</u>

Payback = 3.375 years

Year     Cash Inflow      Initial Investment Balance   Year Count

0                   0                         1,050,000                        

1                   $350,000           700,000                            1

2                  $3150,000          385,000                           2

3                  $280,000           105,000                            3

4                  $280,000           0                                    *3.375

* ( 3 + ( 105,000 / 280,000 ) ) = 3.75 years

5 0
3 years ago
Global Technology’s capital structure is as follows: Debt 50 % Preferred stock 35 Common equity 15 The aftertax cost of debt is
solmaris [256]

Answer:

The computation is shown below:

Explanation:

The computation is shown below:

For weighted cost of each source of capital is

Debt:

= Cost of debt × Weight of debt

= 9% × 50%

= 4.5%

Equity

= Cost of equity × weight of equity

= 16% × 0.15

= 2.4%

Preferred stock

= Cost of preferred stock × weight of preferred stock

= 12.50% × 35%

= 4.375%

Now the weighted average cost of capital is

= 4.5% + 2.4% + 4.375%

= 11.275%

Therefore in the first part we multiplied the cost with the weight of each source of capital

And, then we add the all answers

8 0
3 years ago
If someone stole from you ... and you stole it back ... would you technically still be stealing it ? .
dsp73

Answer:

yes that would still be stealing unless you where taking back what they stole from you but if you take a random thing that wasn't yours to begin with that would be stealing

8 0
3 years ago
Read 2 more answers
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