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- You work for the CEO of a new company that plans to manufacture and sell a new type of laptop computer. The issue now is how to finance the company, with only equity or with a mix of debt and equity. Expected operating income is $690,000. Other data for the firm are shown below. How much higher or lower will the firm's expected EPS be if it uses some debt rather than only equity, i.e., what is EPSL - EPSU? 0% Debt, U 60% Debt, L Oper. income (EBIT) $690,000 $690,000 Required investment $2,500,000 $2,500,000 % Debt 0.0% 60.0% $ of Debt $0.00 $1,500,000 $ of Common equity $2,500,000 $1,000,000 Shares issued, $10/share 250,000 100,000 Interest rate NA 10.00% Tax rate 35% 35% Select one: a. $1.29 b. $1.97 c. $2.23 d. $1.63 e. $1.72You work for the CEO of a new company that plans to manufacture and sell a new product, a watch that has an embedded TV set and a magnifying glass crystal. The issue now is how to finance the company, with only equity or with a mix of debt and equity. Expected operating income is P400,000. Other data for the firm are shown below. How much higher or lower will the firm's expected ROE be if it uses some debt rather than all equity, i.e., what is ROEL − ROEU?4. You work for the CEO of a new company that plans to manufacture and sell a new product, a watch that has an embedded TV set and a magnifying glass crystal. The issue now is how to finance the company, with only equity or with a mix of debt and equity. Expected operating income is $500,000. Other data for the firm are shown below. How much higher or lower will the firm's expected ROE be if it uses some debt rather than all equity, i.e., what is ROEL - ROEU? Do not round your intermediate calculations. 0% Debt, U 60% Debt, L $500,000 $2,500,000 Oper. income (EBIT) Required investment % Debt $ of Debt $ of Common equity $500,000 $2,500,000 0.0% 60.0% $0.00 $1,500,000 $1,000,000 $2,500,000 NA Interest rate 10.00% Tax rate 35% 35% a. 11.21% b. 8.29% c. 9.75% d. 11.70% e. 8.78%
- 7. You work for the CEO of a new company that plans to manufacture and sell a new product, a watch that has an embedded TV set and a magnifying glass erystal. The issue now is how to finance the company, with only equity or with a mix of debt and equity. Expected operating income is S540,000. Other data for the firm are shown below. How much higher or lower will the firm's expected ROE be ifit uses some debt rather than all equity, i.e., what is ROEL. - ROEU? Do not round your intermediate calculations. 0% Deht, U Oper. income (EBIT) Required investment S540,000 $2,500,000 0.0% 60% Debt, L S540,000 $2,500,000 % Debt S of Debt S of Common equity 60.0% S0.00 $1,500,000 S1,000,000 $2,500,000 NA 35% Interest rate 10.00% Tax rate 35% a. 10.74% b. 13.57% c. 14.14% d. 11.88% e. 11.31%7. You work for the CEO of a new company that plans to manufacture and sell a new product, a watch that has an embedded TV set and a magnifying glass crystal. The issue now is how to finance the company, with only equity or with a mix of debt and equity. Expected operating income is $540,000. Other data for the firm are shown below. How much higher or lower will the firm's expected ROE be if it uses some debt rather than all equity, i.e., what is ROEL - ROEU? Do not round your intermediate calculations. 0% Debt, U 60% Debt, L Oper. income (EBIT) Required investment $540,000 $2,500,000 $540,000 $2,500,000 % Debt $ of Debt $ of Common equity 0.0% 60.0% $1,500,000 $1,000,000 $0.00 $2,500,000 Interest rate NA 10.00% Tax rate 35% 35% а. 10.74% b. 13.57% с. 14.14% d. 11.88% е. 11.31%An investor is considering starting a new business. The company would require $475,000 of assets, and itwould be financed entirely with common stock. The investor will go forward only if she thinks the firm can provide a 13.5% return on the invested capital, which means that the firm must have an ROE of 13.5%. How much net income must be expected to warrant starting the business? Please show work in excel
- An investor is considering starting a new business. The company would require $500,000 of assets, and it would be financed entirely with common stock. The investor will go forward only if she thinks the firm can provide a 15.0% return on the invested capital, which means that the firm must have an ROE of 15.0%. How much net income must be expected to warrant starting the business?1) An investor is considering starting a new business. The company would require $475,000 of assets, and it would be financed entirely with common stock. The investor will go forward only if she thinks the firm can provide a 13.5% return on the invested capital, which means that the firm must have a ROE of 13.5%. How much net income must be expected to warrant starting the business? Netincome = 2) Pace Corp.'s assets are $625,000, and its total debt outstanding is $185,000. The new CFO wants to employ a debt ratio of 55%. How much debt must the company add or subtract to achieve the target debt ratio? 29,6 Debt Ratio total debt total Asset 3) Orono Corp.'s sales last year were $435,000, its operating costs were $362,500, and its interest charges were $12,500. What was the firm's times interest earned (TIE) ratio? TIF = earning before tax or Int 29 I = 362500 12500 4) Nikko Corp.'s total common equity at the end of last year was $305,000 and its net income after taxes was $60,000. What…Lana is thinking about making an iventment in a new venture called BluePearl - after performing an analysis of similar firms, she discovered several other firms (3) with the following Enterprise Value to FCF ratios: Firm 1: 5.9 Firm 2: 7.6 Firm 3: 9.1 The cashflows for BluePearl this year are expected to be $1,300,000. If BluePearl doesn't have any debt or cash currently, and 700,000 shares outstanding - what is the Price Per Share for BluePearl?
- Suppose that you are appointed as a finance executive of a dairy product Company of UAE. How you will design the capital structure of the company if company needs to raise capital from $200,000 to $8,00,000 with the mix of Equity and Debt. Determine the EPS in each case and evaluate the best possible actions for the company. During the production process if company needs to raise $ 300,000 more capital then which option suits to company? Through Debt or Equity? Justify your answer in context to the theory of financial intermediation to the mistionYou are about to buy a business that is worth $200,000, but you do not have enough money to purchase the business entirely. You have a total of $90,000 in savings and you are looking at different financing options. Provide information for the following: Explain the advantages of equity financing and debt financing Explain the disadvantages of equity financing and debt financing Provide an example of equity financing Provide an example of debt financing Explain which type of long-term liability financing you would choose to buy the business?You are about to buy a business that is worth $200,000, but you do not have enough money to purchase the business entirely. You have a total of $90,000 in savings and you are looking at different financing options. Provide information for the following: Explain the advantages of equity financing and debt financing Explain the disadvantages of equity financing and debt financing Provide an example of equity financing Provide an example of debt financing Explain which type of long-term liability financing you would choose to buy the business? Provide a suggestion for future business owners on financing