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larisa [96]
3 years ago
9

If a target was purchased for $1,500.0m with an equity contribution of $500.0m, what is the enterprise value of the target if it

used $500.0m of cash flow to repay debt?
a. $1,000.0m
b. $500.0m
c. $1,500.0m
d. $2,000.0m
Business
1 answer:
posledela3 years ago
8 0

Answer: a. $1,000.0m

Explanation:

Even though the company's enterprise value has no growth, the equity investment of the sponsor will rise from $500.0m when purchased to $1,000.0m when the target for the value of the enterprise is sold for $1500.0m.

The debt was $1000m at year 0 while the remaining $500m was for equity. It should be noted that at the fifth year, equity will be $1,000.0m while the debt will be $500m.

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A restaurant currently uses 62,500 boxes of napkins each year at a constant daily rate. The cost to order napkins is $200.00 per
ahrayia [7]

Answer:

xr72*444

Explanation:

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3 0
2 years ago
Abardeen Corporation borrowed $90,000 from the bank on October 1, 2018. The note had an 8 percent annual rate of interest and ma
TiliK225 [7]

Answer:

Interest paid in cash in 2018 = $0

Interest recognized on the Income statement = $1,800

Liabilities recognized = $90,000

Amount paid for Principal and interest = $93,600

Interest reported on 2019 Income statement = 1800

Explanation:

Interest paid in cash in 2018 is zero because interest and principal were paid in cash on the maturity date.

Interest recognized in 2018 = 90000*0.08*3/12 = $1800

liabilities are recognized at original amount because the interest is not capitalized and no payment made thus far.

Amount paid on maturity date is 93,600 ( 90000 principal, 3600 interest)

interest reported is for three months jan - march

7 0
3 years ago
A bank can offer which of the following
konstantin123 [22]

Answer:

Checking Account, Savings Account, Safety Deposit Box

Explanation:

Banks are financial institutions that provide a wide variety of financial services to their customers. They accept customer deposits and issue loans. Commercial banks act as intermediaries between the supply side and demand side of credit.

Commercial banks are also known as deposit-taking institutions. Deposits facilities offered by banks include

  • Checking accounts,
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8 0
3 years ago
Which of the following statements about the relationship between the financial market and the
BigorU [14]

Answer:

C

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7 0
3 years ago
Bethesda Biosys issues an IPO on a best-efforts basis. The company's investment bank requires a spread of 18 percent of the sell
Andrej [43]

Answer:

Bethesda Biosys

Issue of an IPO:

Net proceeds for the issuer is $82 million, if all the 4 million shares are bought by investors.

Explanation:

a) Calculations:

The spread is $4.5 (18% of $25) per share, since average selling price is $25.

Therefore, the net proceed per share is $20.50 ($25 - 4.50).

And the Total Net Proceeds = $82 million ($20.50 * 4 million), assuming that all four million shares were bought by the public.

Note that the question did not provide the necessary information to make the final decision.

b) During the issue of securities, especially an IPO, underwriters, such as investment banks, pay an issuing company for the securities and then sell the securities to the public.  There is always a difference per share price that they are willing to pay the issuer and what they will collect from the investing public.  That difference is called the underwriting spread or simply the spread.

c) Best-Efforts Basis: According to investopedia.com, underwriting on best-effort basis is "an agreement between an underwriter and an issuer in which the underwriter agrees to place as much of an offering with investors as possible, but is not responsible for any portion of the offering it fails to sell."

4 0
3 years ago
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