Answer:
C. She can offer Aneal a position on an individual contributor career track and the title of senior IT specialist.
Explanation:
Answer:
$587,500
Explanation:
You are required to calculate the value of the levered firm;
vL = vU + Dt, whereby;
vL = Value of levered firm
vU = value of unlevered firm
Dt = debt * tax ; which is the tax shield
Find value of unlevered firm;
vU = [EBIT(1-tax) ]/ rE
= [100,000(1-0.30)] / 0.16
= 437,500
Value of levered firm;
vL = 437,500 + (500,000*0.30)
= 437,500 +150,000
= $587,500
The value of current stock price is equal to $57.93
<u>Explanation:</u>
Given dividend = $20 per year
The calculation of current stock price is as follows:
The Stock price at the beginning of 20th year is equal to = $20 divided by 8 percent = 250
Current stock price ( present value ) = 

After calculating, we get, 57.92801
Therefore, the value of current stock price is equal to $57.93 (rounded off to 2 decimal places).
Answer:
i=4.84%
Explanation:
the key to answer this question, is to remember the model of return for a perpeuity dividend calculation:

where value is the current stock price, i is the dividend yield and k is the growth rate, so applying to this particular case we have
k=3.4/91
k=3.74%
and solving i for the previous formula:


