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
Angelina_Jolie [31]
3 years ago
5

Lara's Inc. Is currently an unlevered firm with 450,000 shares of stock outstanding, with a market price of $15 a share. The com

pany has earnings before interest and taxes of $314,000. Lara's met with his bankers, Warne Incorporated and agreed to borrow $825,000, at 5 percent. You are an ardent investor and you currently own 20,000 shares of Lara's stock. If you seek to unlevered your position; how many shares of Lara's stock will you continue to own, if you can loan out funds at 5 percent interest? Ignore taxes in your deliberations. Kindly show all workings.
Mathematics
1 answer:
MA_775_DIABLO [31]3 years ago
5 0

Answer:

Step-by-step explanation:

Value of firm = Number of shares×Market price per share

= 450,000 × $15

= $6,750,000

Value of debt = $825,000

Weight of debt = $825,000 / $6,750,000 = 12.22%

Number of shares continue to own = 20,000 × (1 - 12.22%) = 17,555.56 or 17,556 shares

Number of shares continue to own = 17,555.56 or 17,556 shares

You might be interested in
A bicycle store costs ​$3300 per month to operate. The store pays an average of ​$75 per bike. The average selling price of each
Klio2033 [76]
S=Selling price 135
V=Variable cost 75
F=Fixed cost 3300
Let quantity be Q
The formula to break even is
135Q-75Q-3300=0
Solve for Q
60Q-3300=0
60Q=3300
Q=3300/60
Q=50
So the store must sell 50 bicycles to break even

Hope it helps!

6 0
3 years ago
Read 2 more answers
Solve for x using the diagram of circle C.<br> B В.<br> (3x+49)<br> (5x-7)
Nuetrik [128]

Answer:

googl it

Step-by-step explanation:

its on googl and it has the anwser

4 0
2 years ago
PLEASE HELP!!!! 20 POINTS
Kazeer [188]

Answer:

relative

Step-by-step explanation:

3 0
2 years ago
Read 2 more answers
Ella bought some key chains and spent a total of $32. Each key chain cost the same whole-dollar amount. She bought between 6 and
MrRa [10]
Ella bought 8 keychains. She spent 4 dollars on each KeyChain. Hope this helps
5 0
3 years ago
Evaluate the limit. lim x-&gt; infinity n/3^x
Sav [38]

Answer:

0

Step-by-step explanation:

Find the following limit:

lim_(x->∞) 3^(-x) n

Applying the quotient rule, write lim_(x->∞) n 3^(-x) as (lim_(x->∞) n)/(lim_(x->∞) 3^x):

n/(lim_(x->∞) 3^x)

Using the fact that 3^x is a continuous function of x, write lim_(x->∞) 3^x as 3^(lim_(x->∞) x):

n/3^(lim_(x->∞) x)

lim_(x->∞) x = ∞:

n/3^∞

n/3^∞ = 0:

Answer:  0

7 0
3 years ago
Other questions:
  • Bailey earned $6 worth of interest on his savings account this month. If m represents the amount of money Bailey had last month,
    12·1 answer
  • A (−1,4) maps into A′ (2,−1). Find the translation rule
    9·1 answer
  • Write 95.417 in expanded form with multiplication
    10·1 answer
  • If you have 54 blue marbles and 99 yellow marbles, what is the greatest number of identical marble bags that can be made without
    6·2 answers
  • An eraser is in the shape of a triangular prism. Its dimensions are shown in the diagram. What is surface area of the
    5·2 answers
  • Convert American $553 in Nepal rupees​
    6·1 answer
  • A circle is divided into 8 equal parts what is the total angle measure of 4 parts
    15·1 answer
  • R varies directly as S and inversely as T. if R = 8 when S = 4 and T = 3, then R is equal to ​
    10·1 answer
  • Solve this x/5 = 2 1/2
    10·1 answer
  • Guys pls help meeee<br> i need help
    12·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!