Answer and Explanation:
The computation is shown below:
a. Marpor's value without leverage is
But before that first we have to calculate the required rate of return which is
The Required rate of return = Risk Free rate of return + Beta × market risk premium
= 5% + 1.1 × (15% - 5%)
= 16%
Now without leverage is
= Free cash flows generates ÷ required rate of return
= $16,000,000 ÷ 16%
= $100,000,000
b. And, with the new leverage is
= (Free cash flows with debt ÷ required rate of return) + (Tax rate × increase of debt)
= ($15,000,000 ÷ 0.16) + (0.35 × $40,000,000)
= $93,750,000 + $14,000,000
= $107,750,000
Answer: comparative advantages
Explanation:
Comparative advantages order refers to a method of organizing persuasive speeches whereby the speaker gives points on how the solution to a particular problem is preferable than other solutions that are proposed l.
It is a way of structuring a persuasive speech when the audience knows that there's a challenge regarding a particular thing but wants to be convinced that a particular plan is the best solution when compared to other plans.
In this case, since the speaker is trying to tell the audience that carbon tax is a better solution than an emission trading system to the problem of industrial pollution, then this is referred to as comparative advantage order.
Answer:
Equity sharing
Explanation:
Equity sharing: The term "equity sharing" is also referred to as "co-ownership" or "shared ownership", and is described as a process in which more than one owner is being involved and utilizes one property in order to blend them to "maximize tax deductions and profit". Generally, equity sharing occurs when different parties ought to find a particular home and then buys it together as "co-owners", yet these people tend to join to "co-own" a particular property a person already bought it before or owns it.
In the question above, the given statement represent equity sharing.
Answer:
Break even point in units = 40000 units
Explanation:
The break even point in units is the number of units where the total revenue equals total cost. It is a point of no profit and no loss. The break even point in units is calculated as follows,
Break even in units = Fixed cost / Contribution margin per unit
Where, contribution margin per unit = Selling price per unit - Variable cost per unit
Contribution margin per unit = [1140000 - (570000 + 57000)] / 57000
Contribution margin per unit = $9
Break even point in units = 360000 / 9
Break even point in units = 40000 units
Answer:
An underpriced security will plot above the security market line.
Explanation:
A security market line is plotted from capital asset pricing model(CAPM) equation that shows relationship between return of a stock and beta coefficient. An underpriced security means that it is sold below its intrinsic value hence its rate of return is higher than the return calculated by CAPM. Since the existing rate of return is higher, it will plot on the right side of the security market line which means it's above it.
