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
anyanavicka [17]
3 years ago
5

Bassett Fruit Farm expects its EBIT to be $373,000 a year forever. Currently, the firm has no debt. The cost of equity is 13.2 p

ercent and the tax rate is 35 percent. The company is in the process of issuing $2.8 million worth of bonds at par that carry an annual coupon of 6.6 percent. What is the unlevered value of the firm
Business
1 answer:
julia-pushkina [17]3 years ago
6 0

Answer:

The correct answer is $1,836,742.42.

Explanation:

According to the scenario, the given data are as follows:

EBIT = $373,000

Cost of equity = 13.2%

Tax rate = 35%

So, we can calculate the unlevered value of the firm by using following formula:

Unlevered value of the firm = EBIT × (1 - TAX RATE) ÷ COST OF EQUITY

By putting the value, we get

Unlevered value of the firm = $373,000 × ( 1 - 35%) ÷ 13.2%

= $373,000 × 0.65 ÷ 0.132

= $242,450 ÷ 0.132

= $1,836,742.42

You might be interested in
Distinguish between the benefiets of traditional banking amd the benefiets of online banking
Alona [7]
Traditional banking- you can secure your deposit because you personally banked it..
while
online banking- for me you can't 100% sure your secured because you know there where so many fake agents out there but it's good benefits are you are just sitting and surfing the net and you dont won't be hustle anymore
6 0
3 years ago
When using the continuum leadership model, before selecting one of the seven leadership styles, the leader must consider all of
Rudik [331]

Answer:

no clus

Explanation:

idk

8 0
3 years ago
When a country allows trade and becomes an importer of jet skis,
Delvig [45]
The best answer for this question would be:

<span>b. domestic producers of jet skis are worse off, domestic consumers of jet skis are better off, and the economic well-being of the country rises.

Because originally the jet skis came from the country they originated from so the quality is original and more trusted to the consumers. </span>
7 0
3 years ago
Michael Pollan discusses ""industrial organic"" agricultural systems in The Omnivore’s Dilemma. What is / are characteristic(s)
Kipish [7]

Answer:

The characteristics of industrial organic agriculture are:

  • economies of scale and mechanization
  • substitution of conventional inputs such as conventional fertilizer with organic fertilizers
  • bagging technology makes the transport of organic salads possible

Explanation:

Pollan's book discusses how modern individuals have a disconnection between food and knowledge. Modern individuals just pick up their food and practically don't know anything about how that food got reached our tables.

6 0
3 years ago
Teddy's Pillows had beginning net fixed assets of $471 and ending net fixed assets of $550. Assets valued at $319 were sold duri
photoshop1234 [79]

Answer:

Net Capital Spending = $121

Explanation:

The Net Capital Spending is the amount of money a company spends in the acquisition of fixed assets during the year. Mathematically, it is represented as:

Net Capital Spending = Ending net fixed asset - Beginning net fixed asset + depreciation

Net Capital Spending = 550 - 471 + 42 = $121

∴ Net Capital Spending = $121

3 0
3 years ago
Other questions:
  • For each of the following transactions for , state whether the total effect of the transaction results in an increase, decrease,
    8·1 answer
  • as rome expanded the conquered territories sent payments that honored the acceptance of the new rulers. What were those payments
    7·1 answer
  • Which of the following is true of open market operations? Select the correct answer below: Open market operations involves the b
    10·2 answers
  • Susan opened a savings account with $750 at 2.9 percent annual interest. If she keeps the money in the account for 2 years, what
    12·1 answer
  • The difference between role strain and role conflict is that role strain is about the competing demands imposed by ____, while r
    6·1 answer
  • Perform the indicated operation. (7x4 + 11x3 – x2 – 8x + 6) – (-12x4 + 9x2 – 15) A) -5x4 + 11x3 + 8x2 – 8x – 9 B) 19x4 + 11x3 –
    5·1 answer
  • ____ materials are designed to get you to buy a product or service.
    8·1 answer
  • A company is going to issue a $1,000 par value bond that pays a 5% annual coupon. The company expects investors to pay $684.5 fo
    14·1 answer
  • Financial markets:____________.
    8·1 answer
  • The interest on a $5,400, 3%, 45-day note is ______________.
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!