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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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Jackson Company had a net increase in cash from operating activities of $10,000 and a net decrease in cash from financing activi
zmey [24]

Answer:

A. an outflow or decrease of $1,000.

Explanation:

Ending balance of cash = Opening balance of cash + Net cash flow of the period

Ending balance of cash = Opening balance of cash + ( Cash flow from operating activities + cash flow from investing activities + cash flow from financing activities )

$11,000 = $4,000 + $10,000 + cash flow from investing activities - $2,000

$11,000 = $12,000 + cash flow from investing activities

Cash flow from investing activities = $11,000 - $12,000

Cash flow from investing activities = -$1,000

7 0
3 years ago
What information does a supply schedule provide?
lesya [120]

Answer:

See below

Explanation:

A supply schedule shows the quantities that suppliers are willing to sell in the market at different prices. It is a table format with quantity on one column and prices on another. As per the law of supply, high prices lead suppliers to supply more at the market.

The supply schedule illustrates in a table format the relations between the price and the quantity supplied. It will show how the quantity increase as prices increases. The supply schedule is a tabular representation of the supply curve.

7 0
3 years ago
Which is the best answer choice for the question? To be deductible as the cost of special work clothing or uniforms: a. The clot
larisa [96]

Answer:

a. The clothing must not be suitable for everyday use and must be required as a condition of the job.

Explanation:

For the cost of special work clothes or uniforms to be deductible by the IRS, there must be a number of requirements, it is necessary that work clothes are required as a working condition and that the clothes are used only in the work environment, and not for the employee's personal use.

It is also necessary that the uniforms guarantee the conditions in accordance with the function performed, adding protection instruments when necessary for the health and safety of the employee, in addition, the costs with work clothes can be deductible when they present company logos by example, attesting that such clothing is not for personal use outside the workplace.

4 0
3 years ago
Identify the correct order of the four steps used to prepare a production cost summary (report). 1)Summarize the cost flow of ph
Veronika [31]

Answer:

The answer is "Option C".

Explanation:

The Costs of production relate to the price of a company producing or producing a service, which can include the range of expenditures, like labor, manufactured goods, supplies of items, and expenses. It has mainly four steps that can be defined as follows:

  • Complete the physical unit flow.
  • Measure the production unit's equivalent.
  • Compare the value per unit for output equivalent.
  • Assign costs to finished units and manufactured units.

5 0
2 years ago
Each of the following is a main source of web traffic EXCEPT:
GalinKa [24]

Answer:

I think radio networks

Explanation:

why because i never heard them talk about that stuff on the radio sorry if it was wrong

4 0
3 years ago
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