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arlik [135]
3 years ago
10

Taunton's is an all-equity firm that has 155,500 shares of stock outstanding. The CFO is considering borrowing $287,000 at 7 per

cent interest to repurchase 24,500 shares. Ignoring taxes, what is the value of the firm?
a- 1,821,571

b- 1,908,313

c- 2,081,796

d-2,241,934

e- 2,354,031
Business
1 answer:
Stels [109]3 years ago
4 0

Answer:

a. 1,821,571

Explanation:

Repurchase of shares = 24,500 shares

Share price per share = $287,000/24,500 = $11.7143

Value of the firm = 155,500*11.7143 = $1,821,571

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Vanyuwa [196]

The financial tool that is vital when planning for your future financial goals is creating a budget.

A budget simply means an estimate of the income and the expenditure of an economic entity for a particular period of time.

It should be noted that a budget is vital for an individual to plan his or her expenses. For example, if one wants to buy a car in the future, the person can make a budget for it.

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7 0
2 years ago
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Holding everything else constant, a decrease in the price of bicycles will result in a. a decrease in the quantity of bicycles d
vladimir2022 [97]

Answer:

d. an increase in the quantity of bicycles demanded.

Explanation:

For this question, the law of demand applies.  

According to the law of demand, when the price of the good increases the quantity demanded of that good would be decreased keeping other things constant and when the price of the good decreases the quantity demanded of that good would be increased keeping other things constant.

It reflects the inverse relationship between the price and the quantity demanded of the good.

4 0
3 years ago
In a company's annual report, the section called Management Discussion and Analysis provides critical information for interpreti
ddd [48]

Answer:

A. True

Explanation:

The section called Management Discussion and Analysis in an annual report analyzes the performance of a company, includes comments from the management about the financial statements to allow the readers to understand the information in a better way and includes the future objectives and plans. According to this, the answer is that the statement that indicates that in a company's annual report, the section called Management Discussion and Analysis provides critical information for interpreting the financial statements and assessing the future of the company is true.

7 0
2 years ago
Bramble Corp. incurs the following costs to produce 13000 units of a subcomponent: Direct materials $10920 Direct labor 14690 Va
Mumz [18]

Answer:

$4,850

Explanation:

The computation is shown below:

Total cost when the production is 13,000 units

Direct materials $10,920

Direct labor $14,690

Variable overhead $16,380

Total $41,900

And, the other case

Their new cost on supplier offer is

= $2.85 × 13,000 units

= $37,050

In the case when the order is accepted So the net income would increased by

= $41,900 - $37,050

= $4,850

7 0
3 years ago
Avicorp has a $ 12.9 million debt issue​ outstanding, with a 5.9 % coupon rate. The debt has​ semi-annual coupons, the next coup
zloy xaker [14]

Answer:

a)

Pre-tax Cost Of Debt = 7.64%

b)

Tax Rate = 40%    

Post Tax cost of debt = 7.33% * (1 - 40%) = 4.58%  

So Post Tax cost of Debt = 4.58%

Explanation:

Bond Par Value =  12,900,000  

Bond Market Price 93% of face value = 11,997,000  

Years To maturity = 5.00  

Annual Interest 5.9% = 761,100

Formula = [Annual Interest + (Par Value-Market Value) / Years to Maturity] / [(Par value+Market Price*2)/3]

Year To Maturity = [761100 + (12900000 - 11997000) / 5] / (12900000 + 2*11997000) / 3

Year to maturity = 7.33%

8 0
3 years ago
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