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WARRIOR [948]
3 years ago
5

In "The Founder," The McDonald brothers are worried about maintaining standards in their franchises. What are at least three sta

ndards that are not being met with this franchise that Ray is checking on in this scene?
Business
1 answer:
ycow [4]3 years ago
4 0
The McDonald Brothers had engaged a franchise agent who sold a number of stores for them. But they rebuffed offers to take them out on a wider scale, or to acquire them, because they didn't want the hassle of large-scale qualitycontrol.
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Tropical Fruit Extracts expects its earnings before interest and taxes to be $218,000 a year forever. Currently, the firm has no
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Answer:

The unlevered value of the firm is $869325.15

Explanation:

For computing the value of unlevered firm, the following formula should be used which is shown below:

Value of levered firm = Earning before interest and taxes × (1 - tax rate) ÷ cost of equity

where,

Earnings before income and taxes are $218,000

Cost of equity is 16.3%

And, the tax rate is 35%

Now put these values on the above formula

So, the value would be equals to

= $218,000 × (1 - 0.35) ÷ 16.3%

= $141,700 ÷ 16.3%

= $869325.15

The other terms like bonds and the annual coupon should not be considered in the computation part because we have to calculate for unlevered firm which only includes equity and the bond is a debt security. Thus, it is irrelevant.

Hence,  the unlevered value of the firm is $869325.15

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