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aliina [53]
3 years ago
10

Levered, Inc., and Unlevered, Inc., are identical in every way except their capital structures. Each company expects to earn $29

.3 million before interest per year in perpetuity, with each company distributing all its earnings as dividends. Levered’s perpetual debt has a market value of $94 million and costs 8 percent per year. Levered has 2.6 million shares outstanding that sell for $108 per share. Unlevered has no debt and 4.8 million shares outstanding, currently worth $83 per share. Neither firm pays taxes. What is the value of each company's equity? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)
Business
1 answer:
Ugo [173]3 years ago
7 0

Answer:

Levered -  $280,800,000

Unlevered - $398,400,000

Explanation:

The formula to compute the equity value is shown below:

Equity value = Number of outstanding shares × current worth per share

For Levered, the equity value would be

= 2,600,000 shares × $108

= $280,800,000

For Unlevered, the equity value would be

= 4,800,000 shares × $83

= $398,400,000

We simply multiply the number of outstanding shares with the current worth per share so that the equity value can come.

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Rudy and his publisher require Katherine's expertise in writing a chapter of a book that will be published under Rudy's name. Th
Brilliant_brown [7]

Answer:

The delegation is not effective and valid since the original contract was based on personal skills and it involves personal services.

Katherine's personal expertise is required to write the chapter and Dana does not necessarily possess the same expertise or skills as Katherine does.

4 0
3 years ago
Greer Company developed the following data for the current year:
bixtya [17]

Answer:

option (C) is correct.

Explanation:

Given that,

Beginning work in process inventory: $102,000

Direct materials used: 156,000

Actual overhead: 132,000

Overhead applied: 138,000

Cost of goods manufactured: 675,000

Total manufacturing costs: 642,000

Company's direct labor cost for the year:

= Total manufacturing costs - Overhead cost - Direct materials cost

= Total manufacturing costs - Overhead applied - Direct materials used

= $642,000 - $138,000 - $156,000

= $348,000

5 0
3 years ago
Pilfer Company acquired 90 percent ownership of Scrooge Corporation in 20X7, at underlying book value. On that date, the fair va
Maru [420]

Answer:

C) $100,000

Explanation:

Based on the information given we were told

that the inventory Purchased by Pilfer from

Scrooge was RESOLD to companies that they are unaffiliated to on December 1, 20X8 for the amount of $100,000 which means that the amount of sales that will be reported in the 20X8 CONSOLIDATED INCOME STATEMENT

will be inventory amount of $100,000 that was resold to the unaffiliated companies.

8 0
2 years ago
Which of the following is the least reliable resource for fraud statistics? a. Fraud perpetrators. b. FBI agencies. c. Health ag
Stells [14]

Answer:

The correct answer is A) Fraud perpetrators.

Explanation:

Being fraud a crime it is normal to think of certain attributes that make us determine some characteristics of criminals; Preconceived are: poor education, bad manners, and bad by nature. Scholars of criminal behavior have determined certain personality characteristics of the fraud perpetrator that are far from the stereotypes cited.

3 0
3 years ago
What is Philip's curve long and short ones? ​
Veronika [31]

In the Philip's curve the long run usually refers to the vertical line and the rate of unemployment the short run Philips curve denotes inflation and is in L shaped and the relationships indicates the trade-off between the inflation and the unemployment

Explanation:

This curve in general shows the relationship between the rate of increase in the nominal wages and the rate of unemployment and usually lower the rate of inflation higher will be the wages allotted and it will be the vice versa

There will be a shift in the Philips curve when there is a hike in the oil prices abroad and this will cause the curve to shift leftwards so in the long run it will indicate the unemployment rate and in the short run it will indicate the inflation rate

3 0
3 years ago
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