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Alborosie
3 years ago
7

Morrow Corp. has an EBIT of $925,000 per year that is expected to continue in perpetuity. The unlevered cost of equity for the c

ompany is 13 percent and the corporate tax rate is 25 percent. The company also has a perpetual bond issue outstanding with a market value of $2.55 million.
What is the value of the company?
Business
1 answer:
Vladimir79 [104]3 years ago
7 0

Answer:

The answer is given below;

Explanation:

WACC=EBIT*(1-t)/(E+D)

13%=$925,000*(1-25%)/(E+D)

E+D=$693,750/.13

E+D=$5,336,538

Where E+D is market value of firm

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An acquisition premium is the amount by which the price offered for an existing business exceeds the Select one: a. amount paid
MAVERICK [17]

Answer:

d. pre-acquisition market value of the target company.

Explanation:

An acquisition premium is the amount by which the price offered for an existing business exceeds the pre-acquisition market value of the target company.

An acquisition premium gives the difference between the actual amount of money paid in acquiring a target firm and the estimated real value of obtaining the firm before the acquisition.

Acquisition premium are usually recorded on the balance sheet as "goodwill."

8 0
3 years ago
Review the transactions listed below for thyme advertising company, and classify each transaction as either an operating activit
soldi70 [24.7K]

Answers:


1.       Financing Activity


2.       Operating Activity


3.       Operating Activity


4.       Non Cash Activity


5.       Financing Activity


6.       Non Cash Activity


7.       Operating Activity


8.       Investing Activity


9.       Non Cash Activity


What to remember:


Operating activities are the kinds of activities the company accomplishes to generate profits. This includes cash out flows and inflows.


Investing activities contain the purchase or sale of long-lived assets used in operating the business, or the purchase or sale of investment securities (stocks and bonds of companies other than Thyme).


Financing activities are borrowing money, issuing shares of stock, and paying dividends.

5 0
3 years ago
national savings is equal to the sum of private savings and public savings. to make our notation a bit easier, we will call nati
slamgirl [31]

Here, public savings = $1.05 billion and private savings = $3.15 billion

It is calculated as follows:

Total savings, S = $4.20 billion

We know: S = V+U

It means National Savings = Private savings + Public savings

Here:

V = private savings , U = public savings and

Private saving, V = 0.75 × S

 = 0.75 × $4.20 billion

 = $3.15 billion

And, the public savings will be = National savings - private savings

= $4.20 billion - $3.15 billion

= $1.05 billion

To know more about savings here:

brainly.com/question/10749354

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3 0
2 years ago
A group of sellers who agree to restrict their collective output in order to drive up prices above marginal costs is a:
Salsk061 [2.6K]

A group of sellers who agree to restrict their collective output in order to drive up prices above marginal costs is known as a:

  • <u>Cartel</u>

According to the given question, we are asked to show the term which can be best used to <em>describe </em>a group of sellers who make an agreement to <em>reduce their collective output</em> so that price of goods would increase above their marginal costs.

As a result of this, we can see that this group of people in the business world are known as cartel because they behave unethically so that they could have increased profit on sales.

Read more here:

brainly.com/question/15294015

3 0
3 years ago
Which of the following is a reason that single sourcing is considered risky/bad?a. Larger orders make quantity discounts more li
Alinara [238K]

Answer:

The correct answer is letter "B": There could be supplier interruptions due to political instability.

Explanation:

Single sourcing refers to a company deciding to choose one particular supplier -even if there are many options from where to select- because of a specific reason. The greater disadvantage of this situation is relying on one supplier for the manufacturing process which at a certain point could bring <em>instability </em>in front of different issues inherent or not to the supplier.

6 0
3 years ago
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