Answer:
$4,650,000,000
Explanation:
We will use the formula below to calculate the enterprise value of Correct inc.
Enterprise value = Market value capital and debts - Cash and investments
= 100 million diluted shares × 37.50 per share + $1 billion of debt outstanding - $100 million cash
= $3750m + $1000m - $100m
= $4,650,000,000.
Answer:
Clarissa needs to fund the growing perpetuity by $166666.67
Explanation:
A perpetuity is an investment that will give a future series of infinite payments so if the perpetuity gives you a periodic growth rate then you find the difference between the interest rate and the growth rate then use the perpetuity formula which is:
Pv = C/(i-g)
where Pv is the present value of the perpetuity which will be the initial investment.
C is the periodic payments that will be received in future in this case $5000
i is the interest rate given for the perpetuity which is 8%
g is the growth rate per fixed period which is 5%
thereafter we substitute on the above mentioned formula:
Pv= $5000/(8%-5%) then compute
Pv = $166666.67 which will be the initial investment for Clarissa to be paid $5000 per year until she dies.
I think the answer is D. i’m not really sure but i’m sorry if it is wrong
Answer:
Book value per share is $3.5, Earnings per share is $0.48, Market-to-book ratio is 2.0x; P/E ratio = 18.75
Explanation:
1. In order to calculate the book value of the shares we divide the total value of the shares by the number of shares which is $35,000,000/10,000,000 shares = $3.5
2. Earnings per share is derived by dividing the total earnings (after subtracting preference dividends, but in this case we have common stock dividend so we do not subtract) by the number of shares outstanding. i.e. $4,800,000 / 10,000,000 shares = $0.48
3. Market to book ratio is derived by dividing the market value of the outstanding shares by its book value. Therefore ($9*10,000,000 shares)/$35,000,000 = 2.0 (written as 2.0x, implying that the market value of the shares of Roxie's Bed & Breakfast Corp. can cover its net assets (or equity) twice.)
4.The Price Earnings ratio is derived by dividing the Price of the shares by the earnings per share.i.e. $9/0.48(derived in 2 above) = 18.75.
Perfect competition, monopolistic competition, oligopoly, and monopoly.
