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shepuryov [24]
3 years ago
12

NewKirk Inc.., is an unlevered firm with expected annual earnings before taxes of $21 million in perpetuity. The current require

d return on the firm's equity is 16 percent, and the firm distributes all of its earnings as dividends at the end of each year. The company has 1.3 million shares of common stock outstanding and is subject to a corporate tax rate of 35 percent. The firm is planning a recapitalization under which it will issue $30 million of perpetual 9 percent debt and use the proceeds to buy back shares. What is cash flows available to equity holders after recapitalization?
Business
1 answer:
IrinaVladis [17]3 years ago
8 0

Answer:

$11,895,000

Explanation:

Expected annual earnings before tax = $21,000,000

Debt issue = $30,000,000

Interest rate = 9%

Annual Interest expenses = $30,000,000 × 9%

= $2,700,000

EBT = EBIT - Interest expenses

= $21,000,000 - $2,700,000

= $18,300,000

Net income = $18,300,000 × (1 - 35%)

= $11,895,000

Cash flows available to equity holders after recapitalization will be $11,895,000.

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Which of the following is not an independent contractor relationship? a. one between a corporation and its outside legal counsel
oksano4ka [1.4K]

Answer:

The correct option C

Explanation:

Independent contractor are those people or individuals like lawyers, auctioneers, dentists, sun- contractors, accountants, public and contractors who are in the trade, profession or business independently and offer their services to the general public.

The relationship among the corporation and legal counsel and the relationship among the corporation and general counsel is the valid relationship.

So, the relationship which is not independent contractor is between or among the lawn service business and the homeowner.

5 0
3 years ago
Which business partnership began by selling watches by mail? ben and jerry?
HACTEHA [7]
<span>The business partnership which began by selling watches by mail is the Ben & Jerry's.  The Ben & Jerry's Homemade Holdings Inc., or in short is known as the Ben & Jerry's is a long history of business partnership. Ben Cohen and also Jerry Greenfield are the people behind this business.</span>
7 0
4 years ago
For decision-making purposes, qualitative factors are relevant if they differ among the alternatives and relate to the future.
Flura [38]

Answer:

A: True

Explanation:

Yes, off-course qualitative factors are most relevant if there is a difference among the alternatives they can have a long-term impact on the quality of the product as well as the profitability of the company and it may improve the morale of the employees also. So you must consider them. Qualitative factors must be weighed before initiating any type of decision regarding the company.

5 0
3 years ago
Who wants to talk to me? (NO POLITICS) PLZ :(
vampirchik [111]

Answer:

if no politics why u put category as business xD

Explanation:

8 0
3 years ago
Read 2 more answers
Sam and Teresa run a catering business in which they have two major tasks: getting new clients and preparing food for events and
Sergio [31]

Answer:

The number of new clients will increase by

12/3 = 4

Therefore, the number of new clients will increase by 4.

Explanation:

In getting new client, Sam takes 5hours, while Terasa takes 3hours.

In preparing food, Sam takes 10hours while Teresa takes 12hours.

It can be seen that Sam has absolute advantage and comparative advantage in preparation of food, while Tesesa has absolute advantage and comparative advantage in getting new client.

Sam with the comparative advantage in food preparation will take over preparing food for one more event by taking the necessary time away from getting more clients, and Teresa will use the freed-up time from not preparing food for one event to get more clients.

Teresa will free up 12hours she used in the preparation of food.

Since she use 3hours to get new client, She will get

12/3, which equals 4 number of clients

8 0
3 years ago
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