Book Co. has 1.2 million shares of common equity with a par (book) value of $1.50, retained earnings of $28.8 million, and its shares have a market value of $48.05 per share. It also has debt with a par value of $19.3 million that is trading at 101% of par. a. What is the market value of its equity? b. What is the market value of its debt? c. What weights should it use in computing its WACC? a. What is the market value of its equity? The market value of the equity is S57660000 million. (Round to two decimal places.)

Book Co. has 1.2 million shares of common equity with a par (book) value of $1.50, retained earnings of $28.8 million, and its shares have a market value of $48.05 per share. It also has debt with a par value of $19.3 million that is trading at 101% of par. a. What is the market value of its equity? b. What is the market value of its debt? c. What weights should it use in computing its WACC? a. What is the market value of its equity? The market value of the equity is S57660000 million. (Round to two decimal places.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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2. Book Co. has 1.5 million shares of common equity with a par (book) value of $1.15, retained earnings of $29.9 million, and its shares have a market value of $50.88 per share. It also has debt with a par value of $18.2 million that is trading at 102% of par. a. What is the market value of its equity? b. What is the market value of its debt? c. What weights should it use in computing its WACC? **round to two decimal places**
q6- You are using Bloomberg to look up financial information for Delta Ltd. You determine that the share price is currently $13.80 and that the value of dividends paid over the past year was $1.41. You paid $8.47 for the share exactly one year ago. What would you expect the dividend yield to be according to Bloomberg? a. 62.93% b. 10.22% c. 79.57% d. 16.65%
Assume JUP has debt with a book value of $22 million, trading at 120% of par value. The firm has book equity of $25 million, and 2 million shares trading at $18 per share. What weights should JUP use in calculating its WACC? ..... A. 33.85% for debt, 66.15% for equity B. 29.62% for debt, 70.38% for equity C. 42.31% for debt, 57.69% for equity D. 38.08% for debt, 61.92% for equity
12-1 Romeo Inc. has a debt-equity ratio of 2, a share price of $5, and 500,000 shares outstanding. What is Romeo’s market firm value? Select one: a. $2,500,000 b. $3,750,000 c. $5,250,000 d. $6,250,000 e. $7,500,000
Book Co. has 1.1 million shares of common equity with a par (book) value of $1.30, retained earnings of $30.8 million, and its shares have a market value of $49.52 per share. It also has debt with a par value of $18.8 million that is trading at 102% of par. a. What is the market value of its equity? b. What is the market value of its debt? c. What weights should it use in computing its WACC? a. What is the market value of its equity? The market value of the equity is $ million. (Round to two decimal places.)
50) Tucker Electronic System's current balance sheet shows total common equity of $3,125,000. The company has 125,000 shares of stock outstanding, and they sell at a price of $52.50 per share. By how much do the firm's market and book values per share differ? a. $28.88 b. $31.83 c. $33.43 d. $27.50 e. $30.32 52) Question 52 Bartling Energy Systems recently reported $9,250 of sales, $5,750 of operating costs other than depreciation, and $700 of depreciation. The company had no amortization charges, it had $3,200 of outstanding bonds that carry a 5% interest rate, and its federal-plus-state income tax rate was 25%. In order to sustain its operations and thus generate sales and cash flows in the future, the firm was required to make $1,250 of capital expenditures on new fixed assets and to invest $300 in net operating working capital. By how much did the firm's net income exceed its free cash flow? a. $693.50 b. $804.83 c. $766.50…
Book Co. has 1.3 million shares of common equity with a par (book) value of $1.30, retained earnings of $31.6 million, and its shares have a market value of $50.11 per share. It also has debt with a par value of $20.8 million that is trading at 101% of par. a. What is the market value of its equity? b. What is the market value of its debt? c. What weights should it use in computing its WACC? What is the market value of its debt? The market value of the debt is $ __ million. ? (Round to two decimal places.)
Book Co. has 1.0 million shares of common equity with a par (book) value of $1.00, retained earnings of $30.0 million, and its shares have a market value of $50.00 per share. It also has debt with a par value of $20.0 million that is trading at 101% of par. a. What is the market value of its equity? b. What is the market value of its debt? c. What weights should it use in computing its WACC? a. What is the market value of its equity? The market value of the equity is $ million. (Round to two decimal places.) b. What is the market value of its debt? The market value of the debt is $ million. (Round to two decimal places.) c. What weights should it use in computing its WACC? The debt weight for the WACC calculation is %. (Round to two decimal places.) The equity weight for the WACC calculation is places.) %. (Round to two decimal
P 13-17 (similar to) Question Help Growth Company's current share price is $19.85 and it is expected to pay a $1.00 dividend per share next year. After that, the firm's dividends are expected to grow at a rate of 3.7% per year. a. What is an estimate of Growth Company's cost of equity? b. Growth Company also has preferred stock outstanding that pays a S2.20 per share fixed dividend. If this stock is currently priced at S28.05, what is Growth Company's cost of preferred stock? c. Growth Company has existing debt issued three years ago with a coupon rate of 6.4%. The firm just issued new debt at par with a coupon rate of 6.6%. What is Growth Company's cost of debt? d. Growth Company has 4.9 million common shares outstanding and 1.3 million preferred shares outstanding, and its equity has a total book value of $50.1 million. Its liabilities have a market value of $20.5 million. If Growth Company's common and preferred shares are priced as in parts (a) and (b), what is the market value of…
Book Co. has 1.7 million shares of common equity with a par (book) value of $1.45, retained earnings of $28.4 million, and its shares have a market value of $49.09 per share. It also has debt with a par value of $19.6 million that is trading at 105% of par. a. What is the market value of its equity? b. What is the market value of its debt? c. What weights should it use in computing its WACC? a. What is the market value of its equity? The market value of the equity is $ __ million (Round to two decimal places.) b. What is the market value of its debt? The market value of the debt is $ __ million. (Round to two decimal places.) c. What weights should it use in computing its WACC? The debt weight for the WACC calculation is __ % ? (Round to two decimal places.) The equity weight for the WACC calculation is __ % ? (Round to two decimal places.)
a Des 2. MV Corporation has debt with market value of $100 million, common equity with a book value of $100 million, and preferred stock worth $20 million outstanding. Its common equity trades at $50 per share, and the firm has 6.0 million shares outstanding. What weights should MV Corporation use in its WACC? The debt weight for the WACC calculation is %. (Round to two decimal places.) The preferred stock weight for the WACC calculation is decimal places.) %. (Round to two The common equity weight for the WACC calculation is decimal places.) %. (Round to two
P6.7 Consider the following information about Truly Good Coffee, Inc. Total assets Total debt Preferred stock Common stockholders' equity Net profits after taxes Number of preferred stock outstanding Number of common stock outstanding Preferred dividends paid Common dividends paid Market price of the preferred stock Market price of the common stock Use the information above to find the following. a. The company's book value b. Its book value per share c. The stock's earnings per share (EPS) d. The dividend payout ratio e. The dividend yield on the common stock f. The dividend yield on the preferred stock $240 million $115 million $25 million $100 million $22.5 million 1 million shares 10 million shares $2 per share $0.75 per share $30.75 per share $25.00 per share

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