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Vika [28.1K]
2 years ago
10

Henderson's is an all-equity firm that has 135,000 shares of stock outstanding. Neal, the financial vice-president, is consideri

ng borrowing $220,000 at 7.25 percent interest to repurchase 20,000 shares. Ignoring taxes, what is the value of the firm?
Business
1 answer:
Volgvan2 years ago
4 0

Answer:

The value of the firm is $1,485,000

Explanation:

For computing the value of the firm, first, we have to compute the price per share which equals to

= Borrowed amount ÷ repurchase shares

= $220,000 ÷ 20,000

= $11 per share

Now, the value of the firm should be computed. The formula is used which is shown below:

= Price per share × Number of outstanding shares

= $11 × 135,000 shares

= $1,485,000

Hence, the value of the firm is $1,485,000

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If a journal entry and posting for the use of office supplies during the year is accidentally omitted, what would be the impact
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4 0
2 years ago
Case 6.1 Demand for Gas Guzzlers
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Question 1.: From the standpoint of an automobile company, what sources of information in this article offer secondary data?

Answer:  The

National Automobile Dealers Association surveyed consumers

visiting its Web site for information about car purchases, and it

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model, then performance. Fuel economy ranked last, with 3 percent

considering it most important and 11 percent considering it least

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Question 2: Suggest two or three other sources of data that might be of

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Answer: Data from Automotive News,General Motors, and  data

from the shoppers who visit Web sites such as www.kbb.com to look

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Question 3: Online or at your library, look for information about recent

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Answer: I don't know your library.

Explanation: This took me so long to do. Now my back hurts and my eyes are blurry. Hope this helps!

8 0
1 year ago
You have been pricing an MP3 player in several stores. Three stores have the identical price of $300. Each store charges 24 perc
Valentin [98]

Answer:

a. $5

b. $4

c. $6

Explanation:

a. store A?

Beginning balance = $300

Ending balance = $300 - $100 = $200

Average balance = ($300 + $200) ÷ 2 = $250

Monthly APR = 24% ÷ 12 = 2%

June finance charge = Average balance × Monthly APR = $250 × 2% = $5

b. store B

June finance charge = (Beginning balance - Payments) × Monthly APR = ($300 - $100) × 2% = $4

c. store C?

June finance charge = Beginning balance × Monthly APR = $300 × 2% = $6

8 0
3 years ago
Prometheus Corp. is a large-scale manufacturer of consumer electronic gadgets. As part of its performance management system, Pro
myrzilka [38]

Answer: Critical success factors (CSFs)

 

Explanation:

 The critical success factor is one of the management element that helps in achieving the organizational main goals and their mission in an organization.

The main aim of the critical success factor is that it helps in evaluating all the key factor in the company for increase the performance and also helps in accomplishing the given task.

 According to the given scenario, the Prometheus corporation is one of the large electronic manufacturing firm and each employee of this company contributing in the profits as it is categorized as critical success factor.

 Therefore, Critical success factors (CSFs) is the correct answer.  

6 0
3 years ago
The Inferior Goods Co. stock is expected to earn 13% in a recession, 7% in a normal economy, and lose 6% in a booming economy. T
Natalka [10]

Answer:

Ans. The expected rate of return on the Inferior Goods Co. stock is 5.90%

Explanation:

Hi, you just have to multiply the expected earnings by the probability of occurance of a certain event and then add up all the products. Here is the information all organized to be processed.

Item                  Prob Earn

Booming           20% -6%

Normal           55% 7%

Recession   25% 13%

Ok, now let´s calculate the expected rate of return.

ExpectedReturn=(0.2*(-0.06))+(0.55*0.07)+(0.25*0.13)

ExpectedReturn=-0.012+0.039+0.033=0.059

So the expected rate of return of the stock is 5.90%

Best of luck.

8 0
3 years ago
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