Question 38 Planck USA, Inc. has annual sales of $416,000, a price-samings ratio of 18, and a petargin of 37 percent There are 12.000 shares of stock cotonding What is Planck's pice sale OB (47 CM 100 0115
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Cost of Capital
Shareholders and investors who invest into the capital of the firm desire to have a suitable return on their investment funding. The cost of capital reflects what shareholders expect. It is a discount rate for converting expected cash flow into present cash flow.
Capital Structure
Capital structure is the combination of debt and equity employed by an organization in order to take care of its operations. It is an important concept in corporate finance and is expressed in the form of a debt-equity ratio.
Weighted Average Cost of Capital
The Weighted Average Cost of Capital is a tool used for calculating the cost of capital for a firm wherein proportional weightage is assigned to each category of capital. It can also be defined as the average amount that a firm needs to pay its stakeholders and for its security to finance the assets. The most commonly used sources of capital include common stocks, bonds, long-term debts, etc. The increase in weighted average cost of capital is an indicator of a decrease in the valuation of a firm and an increase in its risk.
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- A Company is generating $10M EBITDA at exit with an exit multiple of 15X. There is a 15% Management Rollover Ownership. Initial Sponsor Equity Was $35M. What is my CoC return? O 3.6X 4.3X 4.0X 2.6XEllington Electronics wants you to calculate its cost of common stock. During the next 12 months, the company expects to pay dividends (D1) of $3.70 per share, and the current price of its common stock is $76 per share. The expected growth rate is 7 percent. (Do not round intermediate calculations. Round the final answers to 2 decimal places.) a. Compute the cost of retained earnings (Ke). Cost of retained earnings % b. If a $7.0 flotation cost is involved, compute the cost of new common stock (Kn). Cost of new common stock %A company expects EPS to be $1 next year. The industry average P/E ratio is 3 and Enterprise multiple is 7.71. The EBITDA for the company is $37.61 million. The firm has debt and preferred stock of $4 million and 10 million shares outstanding. What is an estimate of the firm value using the method of comparables for enterprise multiple? Express your answer in millions of dollars rounded to two decimal places (for example, if you get $12,540,000, input 12.54 as your answer)
- Murray Motor Company wants you to calculate its cost of common stock. During the next 12 months, the company expects to pay dividends (D1) of $2.50 per share, and the current price of its common stock is $50 per share. The expected growth rate is 8 percent. Compute the cost of retained earnings (Ke). Note: Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places. If a $3 flotation cost is involved, compute the cost of new common stock (Kn). Note: Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.An investor buys 100 shares of Altria at $82 per share on margin. The initial margin requirement is 50 percent, and the maintenance margin is 30 percent.a. The price of Altria drops to $61 per share. What is the actual margin now?b. The price of Altria declines further to $59.50. Show why a margin call is generated, or is not warranted.c. The price declines yet again to $55.25. Show by calculations why a margin call is generated.d. Using the information in (3), how much cash must be added to the account to bring it into compliance with the margin requirements?FSIBL has a book value of Tk 10 per share. Company’s market capitalization rate is 12%. The company plans to invest a significant portion of their newly raised capital from IPO for network improvement. Analysts expect that return on equity will be 20% for the next four years and the company plans to retain 100% of their profit for further investment. After year 4, the ROE is expected to drop 10% and payout ratio increases to 0.7 and will continue to do forever. If the market value of the company is 27 Taka, give a recommendation based on the intrinsic value of the stock.
- Please solve the problem max in 30-60 minutes. Please no reject thank u 2. The Charter Company currently owns preferred stock with dividends paid of IDR 1300. If it is estimated that the shares can be sold at a market price of IDR 8000. Determine the cost of preferred stock (KP).Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams at $40 per share. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $40 to $50, and the stock has paid a dividend of $2 per share. Required: a. What is the remaining margin in the account in dollars? b-1. What is the margin percentage on the short position? b-2. If the maintenance margin requirement is 30%, will Old Economy receive a margin call?multiple choice Yes No c. What is the rate of return on the investment? (Negative value should be indicated by a minus sign.)The Evanec Company's next expected dividend, D1, is $3.50; its growth rate is 5%; and its common stock now sells for $38.00. New stock (external equity) can be sold to net $34.20 per share. A) What is Evanec's cost of retained earnings, rs? Do not round intermediate calculations. Round your answer to two decimal places.rs = % B) What is Evanec's percentage flotation cost, F? Round your answer to two decimal places.F = % C) What is Evanec's cost of new common stock, re? Do not round intermediate calculations. Round your answer to two decimal places. re = %
- Please solve fast max 15-20 minutes and no reject thank u The Bell Weather Co. is a fledgling company. Company planning to increase their annual dividend by 20% a year for 4 years and and then reduce the dividend growth rate by 5% per year. New company pays a dividend of $1 per share. What is the current value per sheet shares if the required rate of return is 9.25% (81)a.$35.63b.$38.19c.$41.05d.$43.19Both a call and a put currently are traded on stock XYZ; both have strike prices of $49 and expirations of six months. Required: a. What will be the profit/loss to an investor who buys the call for $4.25 in the following scenarios for stock prices in six months? (Loss amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) b. What will be the profit/loss in each scenario to an investor who buys the put for $7.10? (Loss amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)A company has just paid an ordinary share dividend of 32 cents and expected to pay a dividend of 33.6 cents in one year’s time. The company has a cost of equity of 13%. What is the market price of the company’s shares to the nearest cent on an ex dividend basis? $3.20 $4.41 $2.59 $4.20 Use the following information to answer questions 18 and 19 Bill plans to open a service centre. The equipment will cost $50,000. Bill expects the after-tax cash inflows to be $15,000 annually for 8 years, after which he plans to scrap the equipment and retire. What is the project’s regular payback period? 2.67 years 3.33 years 3.67 years 4.33 years Assume the required return is 10%. What is the project’s discounted payback period? 4.25 years 5.25 years 6 years the project does not payback on discounted basis.