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
Artyom0805 [142]
4 years ago
11

Dabney Electronics currently has no debt. Its operating income is $20 million and its tax rate is 40%. It pays out all of its ne

t income as dividends and has a zero growth rate. The current stock price is $40 per share, and it has 2.5 million shares of stock outstanding. If it moves to a capital structure that has 40% debt and 60% equity (based on market values), its investment bankers believe its weighted average cost of capital would be 10%. What would its stock price be if it changes to the new capital structure
Business
1 answer:
ValentinkaMS [17]4 years ago
6 0

Answer:

$29 per stock

Explanation:

WACC=PBIT*(1-tax)/Market value of firm

10%=$20,000,000*(1-40%)/Market Value of the firm

Market Value of the firm=$20,000,000*60%/10%=$120,000,000

Stock price for all shares=$120,000,000*60%=$72,000,000

Stock price per share=$72,000,000/2,500,000=$29 per share

You might be interested in
Which is not something you should look for in a saving account?
pshichka [43]

Answer:

You should make sure you are putting money into it every week, month, or year.

Explanation:

You must make sure you have enough money in the account so if you have some kind of an injury, or you want to buy something that costs lots of money such as a car, or a house, you want to make sure enough money is going into that account.

6 0
3 years ago
"PDQ Corporation has declared a rights offering to stockholders of record. The company has 5,000,000 shares outstanding and is s
Nimfa-mama [501]

Answer: C. II and III

Explanation:

There are 5,000,000 shares of PDQ Corporation as of when they declared the rights offering. This means that every share will get a right to buy stock.

However, as only 1,000,000 shares are being offered per the 5,000,000 shares outstanding it means that one stock may be purchased for every 5 rights.

A customer who owns 500 shares will therefore get 500 rights.

However with one stock up for sale per 5 rights they will receive the opportunity to buy;

= 500/5

= 100 shares

5 0
3 years ago
Which of the following is associated with the market development strategy?
pantera1 [17]

Answer: Option (c) is correct

From the given option the following is associated with the market development strategy: <em>Adding new features to products.</em>

Market development refers to the technique under growth strategy that visualize and establish new market segments for their products. This terminology targets non-buying individuals in targeted segments. This also targets new individuals in new segments.

4 0
3 years ago
Levine Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product. Direct
FinnZ [79.3K]

Answer:

Total materials variance = (Actual quantity * Actual price) - (Standard quantity * Standard price)

= 2,850 - (230 * 14.4)

= 462 (Favourable)

Materials price variance = (Standard price - Actual price) * Actual quantity

= [1.8 - (2,850/1,500)] * 1,500

= 150 Unfavourable

Materials quantity variance = (Standard quantity - Actual quantity) * Standard price

= [(230 * 8) - 1,500] * 1.8

= 612 Favourable

Total labour variance = (Actual hours * Actual rate) - (Standard hours * Standard rate)

= 19,458 - (230 * 84)

= 138 Unfavourable

Labour price variance = (Standard rate - Actual rate) *  Actual hours

= [14 - (19,458/1,410)] * 1,410

= 282 Favourable

Labour quantity variance = (Standard hours - Actual hours) * Standard rate

= [(230 * 6) - 1,410] * 14

= 420 Unfavourable

6 0
3 years ago
Theresa, an HR manager, works for a firm that is planning to expand overseas. Theresa is in the process of workforce planning an
podryga [215]

Answer:

Identify labour supply-demand gaps

Explanation:

Theresa as an HR manager must identify the labour supply-demand gaps. She has identified the firm's labour demand, and now the next step should be to identify the supply of labour and then to understand the gap. The labour supply-demand gap will help the HR manager to identify the possible changes which she must do to fulfil the firm's labour demand.

5 0
4 years ago
Other questions:
  • If you get a personal loan, and the bank asks for something to guarantee the loan, the bank is asking for what?
    5·2 answers
  • Saran Company has contacted Crane with an offer to sell it 5,100 of the wickets for $16 each. If Crane makes the wickets, variab
    10·1 answer
  • Baine lived in Bristol Harbor, a resort area on the Atlantic coast. She entered into a written agreement to sell her daily catch
    14·1 answer
  • What is the relationship between saving and investing??
    12·1 answer
  • The Unique Bookshelf Company is considering the purchase of a custom delivery van costing approximately $50,000. Using a discoun
    5·1 answer
  • A price support is a type of _____.
    5·2 answers
  • A fire has destroyed a large percentage of the financial records of the Inferno Company. You have the task of piecing together i
    14·1 answer
  • What can disqualify you from unemployment benefits.
    6·1 answer
  • According to Guy Kawasaki, intelligent, deep, complete, empowering, and elegant are qualities of curve-jumping products Select o
    7·1 answer
  • When a negative real shock hits the economy, in the absence of any monetary intervention?
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!