Answer:
B
Explanation:
I'm taking public speaking in college now dress is important because it conveys the character of the speaker.
Answer:
$18.41
Explanation:
Equity value = FCF next year / (1 + cost of capital) + FCF in year 2 / (1 + cost of capital)^2 + 1 / (1 + cost of capital)^2 * [ (FCF in year 2 * exit multiple)]
= $25 million/1.12 + $29 million/1.12^2 + 1 / 1.12^2*[($29 million*17)]
= $25 million/1.12 + $29 million/1.12^2 + $493 million/1.12^2
= $25 million / 1.12 + $522 million / 1.12^2
= $438.4566327 million
The stock price = ($438.4566327 million - Debt + Cash) / Number of shares outstanding
= ($438.4566327 million - $34 million + $19 million) / 23 million shares
= $423.4566327 million / 23 million shares
= 18.4111579435
= $18.41
Answer:
Laurel: price will decrease by 4.73% if the rates increases by 2%
and it will increase by 5.66% if the rates decreases by 2%
Hardy:
+22.28% if rate fall by 2%
-16.05% if rate decrease by 2%
Explanation:
To solve for percentage we use $1 as face value
We solve calculating the preent value of the coupon payment using the present value of an ordinary annuity formula
and add it with the present value of maturity which is calculate with the present value of lump sum
Laurel Inc:
C 0.0350
time 6.0000
rate 0.0450
PV 0.1805
Maturity 1.00
time 3.00
rate 0.09
PV 0.77
PV c $0.1805
PV m $0.7722
Total $0.9527
0.9527 - 1 = - 0.0473
a decrease of 4.73 if rate increase by 2%
C 0.0350
time 6.0000
rate 0.0250
PV 0.1928
Maturity 1.00
time 3.00
rate 0.05
PV 0.86
PV c $0.1928
PV m $0.8638
Total $1.0566
5.66% increase if rates fall 2%
For Hardy Corp we do the same procedure
C 0.0350
time 32.0000
rate 0.0250
PV 0.7647
Maturity 1.00
time 16.00
rate 0.05
PV 0.46
PV c $0.7647
PV m $0.4581
Total $1.2228
22.28% if rate fall by 2%
C 0.0350
time 32.0000
rate 0.0450
PV 0.5876
Maturity 1.00
time 16.00
rate 0.09
PV 0.25
PV c $0.5876
PV m $0.2519
Total $0.8395
0.8395 - 1 = 0.1605
Answer: $7200
Explanation:
From the question, we are informed that On January 2, 2020, Howdy Doody Corporation bought 12% of Ranger Corporation's common stock for $50,000.
We are further told that during 2020, Ranger declared and paid a dividend of $60,000 and that on December 31, 2020, the fair value of the Ranger stock owned by Howdy Doody had increased to $70,000.
The amount that Howdy Doody show in the 2021 income statement as income from this investment will be:
= $60,000 × 12%
= $60,000 × 0.12
= $7,200