Answer:
$2,152.22
Explanation:
Given that,
FinCorp’s free cash flow (FCFF) = $205 million
Firm’s interest expense, i = $22 million
Tax rate, t = 35%
Growth rate, g = 3%
Cost of equity, e = 12%
Net debt of the firm increases by $3 million
Interest expense (Net of tax) = -i × (1 - t)
= -$22 × (1 - 35%)
= -$22 × 0.65
= -$14.3
FCFE = FCFF + Debt + Interest expense (Net of tax)
= $205 million + $3 - $14.3
= $193.7
Therefore,
Market value of equity = FCFE ÷ (e - g)
= $193.7 ÷ (0.12 - 0.03)
= $2,152.22
Its a pretty hard question but still u can someone else
I would say that the stock market deals with selling and buying shares according to the confidence of the shareholders in say the price of metals and the quality of the companies' assets, whereas for currency exchange, it is based on the exchange rates between currencies and converting one to the other.
The producer will decrease the quantity of bicycle production. In the basic Laws of supply and demand, when price decreases there is an increase of supply. Therefore the decrease of price suggest that there is an increase of supply in the market. Also as the price decreases profitability also decreases.