1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
iogann1982 [59]
3 years ago
9

Eccles Inc., a zero growth firm, has an expected EBIT of $100,000 and a corporate tax rate of 30%. Eccles uses $500,000 of 12.0%

debt, and the cost of equity to an unlevered firm in the same risk class is 16.0%. Refer to the data for Eccles Inc. What is the value of the firm according to MM with corporate taxes?
Business
1 answer:
Feliz [49]3 years ago
6 0

Answer:

$587,500

Explanation:

You are required to calculate the value of the levered firm;

vL = vU + Dt, whereby;

vL = Value of levered firm

vU = value of unlevered firm

Dt = debt * tax ; which is the tax shield

Find value of unlevered firm;

vU = [EBIT(1-tax) ]/ rE

    = [100,000(1-0.30)] / 0.16

    = 437,500

Value of levered firm;

vL = 437,500 + (500,000*0.30)

   = 437,500 +150,000

   = $587,500

You might be interested in
Should i study fashion or business to be a fashion entrepunuer
frosja888 [35]

Answer:

there must be specific courses for it which has both fashion and business

8 0
3 years ago
Read 2 more answers
16. Which of the following statements about capital budgeting is correct? A. The timing of cash flows is irrelevant in capital b
Elden [556K]
I think C is the answer, however I am unsure.
5 0
3 years ago
According to TASB, school districts may approach voters to issue bonds for?
leva [86]

The TASB, is the Texas Association of School Boards. A bond is an agreement between a company and a person or two or more people on the purchase of an item, most of the times known as a bond. In this case, the agreement is between the school district and the bond holder. The district pays the bondholders interest and the bond holder receives a tax write off for donating to the school district.

4 0
3 years ago
Last month, the Tecumseh Corporation supplied 400 units of three-ring binders at $6 per unit. This month, the company supplied t
Dmitry [639]

Answer:

B

Explanation:

according to the law of supply, the higher the price, the higher the quantity supplied and the lower the price, the lower the quantity supplied

in this question, there was only a change in price but no change in the quantity supplied.

so a change in supply and not a change in the quantity supply occured

determine supply per price

400 / 6 = 67

400 / 4 = 100

supply increased

8 0
3 years ago
For students not wanting a traditional major in marketing or accounting, for example, YSU decided to create a general business m
ahrayia [7]

Answer:

The correct approach is "Customization".

Explanation:

  • Customization continues to recognize a consumer preference but instead wants to increase consumer satisfaction whilst also implementing the merchandise to individual communities.
  • Configuration of the software systems throughout meeting personal eligibility criteria. Before the next organization could streamline its operational activities utilizing software applications, one must first ensure that the computer seems to be capable of automating together all procedures it requires.
7 0
3 years ago
Other questions:
  • What causes a mortgage foreclosure?
    13·2 answers
  • Omega Inc. expects its net income to be $525,000 this year. The firm's dividend payout ratio is 60 percent. The firm is financed
    9·1 answer
  • Acme, Inc., supplies rocket ships to the retail market and hires workers to assemble the components. A rocket ship sells for $35
    8·1 answer
  • Compute NOPAT Using Tax Rates from Tax Footnote The income statement for TJX Companies follows. THE TJX COMPANIES, INC. Consolid
    14·1 answer
  • You have the following information regarding a bond that pays semi-annual coupon payments: Time to maturity is 12 years Coupon R
    13·1 answer
  • g Hall Company sells merchandise with a one-year warranty. In the current year, sales consisted of 4,211 units. It is estimated
    11·1 answer
  • Your large business just issued bonds for $10 million. You are excited about utilizing the new funds to expand. As you create yo
    7·1 answer
  • If bonds are issued with a stated interest rate higher than the market interest rate, the bonds will be issued at:
    8·1 answer
  • If a U.S.-based automobile parts supplier were to apply a global mind-set to its internal analysis, it would: a. review sales da
    6·1 answer
  • Utimately, to be successful, a business must
    6·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!