Entries by Hannah Wangui

Equity-financed

Question Equity-financed with 100,000 shares. An issue of $260,000 of debt with 12% interest. Repurchase 26,000 shares at $10 per share. $126,000 will be profits before interest A. What is the ratio of price to be expected earnings before it borrows the $260,000? B. What will the ratio be after it borrows?    Looking for a […]

 

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Book Value BalanceNet

Question Book Value BalanceNet Working Capital $ 30        Debt $80Long Term Assets      70         Equity 20                                    100                     100 Market Value Balance Net Working Capital $ 30       Debt $80 Long Term Assets    170         Equity 120                                    200                         200  $80 of debt and 32% corporate tax rate. A grace period of 5 years. What will be the new value of the firm? Borrowing rate of 6.5% […]

 

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decision

Question When a decision is made in an organization, it is selected from a group of alternative courses of action (i.e., decision alternatives). The loss associated with not choosing a given decision alternative is referred to as a(n): Sunk cost. Discretionary. Opportunity cost. Committed cost. Outlay cost.   Looking for a Similar Assignment? Order now […]

 

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