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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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lina2011 [118]

Answer:

The options for this question are the following:

A) economic

B) legal

C) ethical

D) demographic

The correct answer is C) ethical .

Explanation:

Ethical responsibility is the fulfillment of implicit or explicit agreements with respect to what should be the appropriate and respectful conduct in a field or profession. Its purpose is to guarantee the correct performance of those responsible for the actions to be carried out and achieve the well-being of all those involved in said practice.

3 0
3 years ago
Explain the relationship between market and entrepreneurship....long answer plz..​
spin [16.1K]
Market is more for everyone working as a group and entrepreneurship is when there is one owner that works
6 0
3 years ago
Why shouldn’t i let someone else use my business name
Strike441 [17]
Hello,

Not sure if this is a school related question but i have the answer for ya (:

There are multiple reasons on why you shouldn't let another person use your business name.
1. They can make YOUR profit off of what you sell
2. It can lead to a law suit in the future
3. 2 businesses using the same name always leads to unwanted problems, finance cases, business claims, and the possibility of being sued by the other person.

Best option would be for you to make your own business name and get it trademarked so that nobody will copy you! (:
4 0
3 years ago
The accounting records of Whispering Winds Corp. show the following data. Beginning inventory 3,010 units at $6 Purchases 8,130
Sindrei [870]

Answer:

$66,700

b. LIFO = $70800

67807.81

Explanation:

LIFO means last in first out. It means that it is the last purchased inventory that is the first to be sold.

(8130 x 8) + [(9090 - 8130) x 6) = 70800

FIFO means first in, first out. It means that it is the first purchased inventory that is the first to be sold

(3010 x 6) + [(9090 - 3010) x $8] = 66,700

Average cost = [(3010 x 6) + (8130 x 8)] /

18060

48640

b 65040

5760

7 0
3 years ago
17. What positive outcomes are associated with<br> saving money and why?
vekshin1

Answer:

Positive out comes in saving money is helping u make an investment in what ur passionate in.

Explanation: like say u want to buy or invest into a career by saving ur money you can get to that point and that is basically a positive outcome for you and the money you have saved.

hope this was a valid answer

6 0
3 years ago
Read 2 more answers
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