Answer:
$.5
Explanation:
Net Income $200,000
Shares outstanding from Jan 1-June 30 450,000*6/12=225,000
Shares outstanding from Jul 1-December 31 (450,000-100,000)*6/12=175,000
Weighted average shares outstanding (225,000+175,000)=400,000
Basic EPS=Net income-preferred stocks dividend (if any)/Weighted Average shares outstanding=$200,000/400,000=$.5
They don't have to pay as much interest.
Answer:
The company should not further process the product as it results in income reduction by $1000.
Explanation:
According to the given data, company current profit for 1000 units is :
= (cost of sell) - (cost of manufacturing)
= $7000 - $5000
= $2000 (current profit)
While when company further process the product, the profit will be :
= (cost of sell) - (cost of manufacture)
= $10000 - ( $5000 + $4000)
= $10000 - $9000
= $1000
It clearly shows that further processing the product may result in reduction of profit by $1000.
Hence the company should not further process the product.
Answer:
If Pinnacle was an all equity firm its WACC would be the same as the cost of equity capital which is 15%.Also if it was an all equity firm all the free cash flow would be available to the shareholders as there was no debt and no money needed to be given to the debtors
The formula to find the value of a firm using the FCF is
FCF*(1+G)/WACC-G
14*(1+0.5)/0.15-0.5
=14.7/0.10=147
The value of Pinnacle as an all equity firm would be $147 million
Explanation:
