A firm has a currentmarketvalueofINR250 crores. The current cost of equity is 15%and the tax rate is 20 percent. If the firm has announced to issue a per- petual debt of INR 50 crores at 6% interest rate to change the capital structure of the firm, what is the market value of the firm after this announcement?
In: Finance
When a country's risk-free rate falls, the cost of equity to an MNC in that country ___, and the cost of debt to an MNC in that country __, other things held constant.
increases; increases
decreases; decreases
is not affected; increases
is not affected; is not affected
In: Finance
A firm has a currentmarketvalueofINR250 crores. The current cost of equity is 15%and the tax rate is 20 percent. If the firm has announced to issue a per- petual debt of INR 50 crores at 6% interest rate to change the capital structure of the firm, what is the market value of the firm after this announcement?
In: Finance
BCC is looking to acquire ZZP Co. This investment will cost $2.3 million and is expected to give BBC returns of $680,000 yearly for the next 11 years. ZZP has a beta of 2.1. The current treasury bond rate is 3.7% while the stock market return is 14.9%. Calculate the risk-adjusted discount rate for ZZP and the risk-adjusted NPV. Should BBC acquire ZZP? State your reasons.
In: Finance
| The following are the transactions for the month of July. |
| Units | Unit Cost | Unit Selling Price |
||||||||
| July 1 | Beginning Inventory | 45 | $ | 10 | ||||||
| July 13 | Purchase | 225 | 13 | |||||||
| July 25 | Sold | ( | 100 | ) | $ | 15 | ||||
| July 31 | Ending Inventory | 170 | ||||||||
|
Calculate cost of goods available for sale and ending inventory, then sales, cost of goods sold, and gross profit, under (a) FIFO, (b) LIFO, and (c) weighted average cost. Assume a periodic inventory system is used. (Round "Cost per Unit" to 2 decimal places and your final answers to nearest whole dollar amount.) |
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In: Finance
When a country's risk-free rate falls, the cost of equity to an MNC in that country _____, and the cost of debt to an MNC in that country ____, other things held constant.
In: Finance
If a company adds 60 new workstations at a cost of $100,000 each and also spends $20 million for additional space in its camera/drone assembly facilities to accommodate more workstations, then its annual depreciation costs will rise by?
How do I know what deprecijation rate to use? *** (ie. 4% or 5%)
In: Finance
Estimate this company's cost of common equity.
This is a set of data you were able to collect. Upcoming dividend
(D1) = $2.25; Price as of today = $27.50; Capial Gain Yield= 7.00%
(constant); and F = 10.00%; Tax rate =40%.
What is the cost of equity raised by selling new common stock?
In: Finance
Mr. Big purchased a corner lot five years ago at a cost of $498,000 and then spent $63,500 on grading and drainage so the lot could be used. The lot was recently appraised at $610,000. The company now wants to build a new retail store on the site. The building cost is estimated at $1.1 million. What amount should be used as the opportunity costs at time 0 for this building project?
$1,710,000
$673,500
$1,100,000
$561,500
$610,000
In: Finance
Your firm is considering a project with a four-year life and an
initial cost of $87,000. The discount rate for the project is 15
percent. The firm expects to sell 1,800 units a year. The cash flow
per unit is $19. The firm will have the option to abandon this
project after two years at which time they expect they could sell
the project for $40,000. At what level of sales should the firm be
willing to abandon this project?
A. 1,295 units
B. 1,361 units
C. 1,540 units
D. 1,565 units
In: Finance