Answer:
(A) $93.33 million
(B) $98.25 million
Explanation:
Milton expects a free cash flow of $14 million each year
The corporate tax rate is 21%
The unlevered cost of capital is 15%
Milton has an outstanding debt of $23.44 million.
(A) The value of Milton's industry without leverage can be calculated as follows
= Free cash flow/unlevered cost of capital
= $14 million/15%
= $14 million/0.15
= $93.33 million
(B) The value of Milton with leverage can be calculated as follows
= unlevered value + tax rate × debt
= $93.33 million + 21% × $23.44 million
= $93.33 million + 0.21 × $23.44 million
= $93.33 million + $4.922 million
= $98.25 million
Do you have a picture or something yes or no
I think it's both the applicant and employers.
Answer:
Decline & Downward
Explanation:
Taylor rule states that when the current inflation is higher than the target inflation the central bank should increase the interest rates. Therefore, central banks that does not follow Taylor rule, will not increase the interest rate in case of higher inflation expectation that eventually lead to:
- Decline in real interest rates (difference between interest rate & nominal inflation), as nominal inflation is increasing and interest rates are unchanged.
- Downward sloping curve as short term inflation expectations are higher
