Answer: SEE EXPLANATION
Explanation:
Given the following ;
Values depending on Success
$150M, $135M, $95M, $80M
Risk free rate = 5% = 0.05
Pervebtage to be lost in case of bankruptcy = 25% = 0.25
A.) 0.25 × [( 150 + 135 + 95 + 80) ÷ 1.05] = $109.52 million
Assume a zero-coupon debt with a $100million face value
B.) 0.25 × [( 100 + 100 + (95×0.75) + (80×0.75)) ÷ 1.05] = $78.87 million
C.) Yield to maturity (YTM)
(100M÷78.87M) - 1
1.2679 - 1 = 0.2679 = 26.79%
Expected return = 5%
D.) Equity value
0.25 × [( 150 + 135 + (95×0.75) + (80×0.75)) ÷ 1.05] = $99.11 million
E.) share if no debt is issued
109.52 ÷ 10 = 10.95 per share
F.) Share price if debt of $100M is issued
99.11 ÷ 10 = 9.91 per share
The price differs because bankruptcy cost will Lower the share price.
Answer:
$48,000
Explanation:
The computation of the corporation debt is shown below:
Since the asset is increased by 20%
The present asset is $100,000
ANd, the increased assets is
= $100,000 + $100,000 × 0.20
= $100,000 + $20,000
= $120,000
Now the debt is
= $120,000 × 0.4
= $48,000
hence, the last option is correct
The price system is an important component of the market because it coordinates the activities of producers, consumers, and owners of resources.
The answer to this question is option c. In economics the price system can simply be described as the way of organizing economic activities.
In order to do this, it coordinates the decisions of the buyers, the suppliers or the producers, and the owners of productive resources.
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Wow! If my boss is this generous, I will first thank him or her. After that, I will make a list of the office supplies I will need to be more productive at work. Note that not all supplies may be granted so don't keep your hopes up. The next thing I'll do is to have him acknowledge the list I made and thank him for giving me this opportunity.
So let us note what we have to do:
1) Thank your boss.
2) List down the office supplies you need.
3) Have your boss authorize the list and thank him or her once again.
To calculate the present value. she should use the DISCOUNTING METHOD.
The discounting method is a valuation technique that is used to calculate the value of an investment opportunity. The method uses cash flow projections that does not take the future into consideration and discount them to get the present value estimates.
