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Roman55 [17]
3 years ago
8

DAR Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under P

lan I, the company would have 170,000 shares of stock outstanding. Under Plan II, there would be 120,000 shares of stock outstanding and $2.21 million in debt outstanding. The interest rate on the debt is 7 percent and there are no taxes. Use M&M Proposition I to find the price per share. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Share price $ per share What is the value of the firm under each of the two proposed plans?
Business
1 answer:
andreyandreev [35.5K]3 years ago
3 0

Answer:

Value of firm in levered plan = $4,930,000

Explanation:

We can find the price per share by dividing the amount of debt used to repurchase shares by the number of shares repurchased. Doing so we get the share price:

Share price = $1,450,000 / (170,000 -120,000)

Share price = $29

Now the value of firm in all equity plan = $29 x 170,000 = $4,930,000

Value of firm in levered plan = $29 x 120,000 + $1,450,000

Value of firm in levered plan = $4,930,000

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Sever21 [200]

Answer:

$87,200

Explanation:

The computation of the total amount of merchandise purchase is shown below:

As we know that

Cost of goods sold = Beginning merchandise inventory + purchase of merchandise - ending merchandise inventory

$69,400 = $11,600 +  purchase of merchandise - $29,400

$69,400 = -$17,800 + purchase of merchandise

So, purchase value of merchandise is

= $69,400 + $17,800

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5 0
3 years ago
Intensity pertains to the amount of effort being invested in an activity. Group startsTrue or False
mixas84 [53]

Answer:

true

Explanation:

7 0
3 years ago
The following transactions were made by Ruby Inc. last year:
Juliette [100K]

Answer:

OPtion (C) is correct.

Explanation:

Given that,

Issuance of common stock = $100,000

Dividends paid to the company's stockholders = $2,000

Depreciation expense = $6,000

Repayment of principal on bonds = $40,000

Proceeds from the sale of the company's used equipment = $39,000

Purchase of land = $230,000

Cash flow from financing activities:

= Issuance of common stock - Dividends paid to the common stockholders - Repayment of principal on the company's own bonds

=  $100,000 - $2,000 - $40,000

= $58,000

Therefore, the net cash inflow from financing activities is $58,000.

8 0
3 years ago
How much can Azco Autosystems, Inc., afford to spend on an energy management system if the software will save the company $21,30
ivann1987 [24]

The amount that that  Azco Autosystems, Inc.,  can afford to spend on an energy management system is $80,744.

<h3>Present value</h3>

Using this formula

Present Value = A(P/A, 10%, 5)

Where:

A=$21,300

(P/A, 10%, 5)=3.79079

Let plug in the formula

Present Value = 21,300 (P/A, 10%,5)

Present Value = 21,300 (3.79079)

Present Value =80,743.8

Present Value = $80,744 (Approximately)

Inconclusion the amount that that  Azco Autosystems, Inc.,  can afford to spend on an energy management system is $80,744.

Learn more about present value here:brainly.com/question/15904086

4 0
2 years ago
Viet drives around and checks meters to document the amount of electricity used in homes. What Energy pathway is he a part of? E
Aloiza [94]

Answer:

he would be part of the energy distribution process

Explanation:

As Viet drives around and checks meters to document the amount of electricity used in homes since the electricity is distributed off  a power line into the house and then within the house by the wiring to the lights and the electrical outlets for usage by the inhabitants.

6 0
3 years ago
Read 2 more answers
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