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Alisiya [41]
3 years ago
9

The firm is currently an all-equity firm with assets worth $250 million and 100 million shares outstanding. The firm plans to bo

rrow $100 million and use these funds to repurchase shares. The firm’s marginal corporate tax is 20%, and it plans to keep its outstanding debt equal to $100 million permanently. What is the lowest price per share the firm can offer and have shareholders tender their shares? A) $3.50 B) $1.50 C) $1.70 D) $2.50 E) $2.70
Business
1 answer:
4vir4ik [10]3 years ago
7 0

Answer:

C) $1.70

Explanation:

The value of the firm after the debt would be = 250 million + (20% * 100 million) =  $270 million

Value of equity = Total value of firm - Value of debt

Value of equity = $270 million - $100 million

Value of equity = $170 million

The total number of share outstanding is 100 million shares

Hence, he should offer the shares at = $170 million / 100 million shares = $1.7 per share

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mortgage account

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3 years ago
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Sally, Greg, John, and Amar are working on a project for a customer that is aimed at cutting the client's electrical costs. The
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Answer: Virtual organization

Explanation:

Virtual organization is a firm of organization whereby the members or the employees are geographically apart and not at the same place and therefore communicates by using their e-mails, phones, collaborative computing, or any other means of communication.

The virtual organization is what is being used by Sally, Greg, John, and Amar in the question above.

7 0
3 years ago
What is the price of a coupon bond that has annual coupon payments of $75, a face value of $1000, interest rate of 5%, and a mat
Citrus2011 [14]

$1,046.49.

The price of a coupon Bond that has periodic coupon payments of $ 75, a face value of  $ 1000, an interest rate of 5%, and a maturity of two times is $1,046.49.

Coupon Bond: A bond having tickets attached that reflect semiannual interest payments is known as a coupon bond, deliverer bond, or bond pasteboard. With coupon bonds, the issuer doesn't keep any records of the buyer, and no instrument has the buyer's name moreover.

The price of a coupon bond that has periodic coupon payments of $75, a face value of $1000, an interest rate of 5%, and a maturity of two times is $1,046.49.

To learn more about Coupon Bond, visit the following link:

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6 0
2 years ago
Green Cabinets is a custom cabinet builder. They recently completed a set of kitchen cabinets (Job Number 1478), as summarized b
Alinara [238K]

Answer:

a. $612

b. $2,480

Explanation:

a. Overhead is applied at a rate of $12 per direct labor hour.

Overhead applied would therefore be;

= 12 * total labor hours

= 12 * 51

= $612

b. Total Cost = Direct labor cost + Direct Material cost + Manufacturing overhead

= 978 + 890 + 612

= $2,480

5 0
3 years ago
As a CEO, you are concerned that your firm and the industry in your country are being devastated by foreign imports. Trade lawye
sashaice [31]

Answer:

The company can file antidumping case against the leading foreign rivals. The probability of winning the case is only high when there is cash deposits near to zero in the country and balance of payment is negative.

Explanation:

There can be a law suit files against the foreign rivals but the company will have to bear lawyers fee for this. There is a threat to employment of labor in the home country as most of the goods are imported so factories in the home country will be moved towards shut down because consumers will be buying imported goods which are offered at low price.

7 0
3 years ago
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