a. Global used $19.8 million of its available cash to repay $19.8 million of its long-term debt. (Select the best choice below.) O A. Long-term liabilities would decrease by $19.8 million, and cash would decrease by the same amount. The book value of equity would change by $19.8. O B. Long-term liabilities would decrease by $19.8 million, and cash would increase by the same amount. The book value of equity would be unchanged. O C. Long-term liabilities would increase by $19.8 million, and cash would increase by the same amount. The book value of equity would be unchanged. OD. Long-term liabilities would decrease by $19.8 million, and cash would decrease by the same amount. The book value of equity would be unchanged.

You are building a free cash flow to the firm model. You expect sales to grow from $2 billion for the year that just ended to $2.2 billion five years from now. Assume that the company will not become any more or less efficient in the future. Assume that the company will grow at a constant rate for 5 years, and then at a constant rate of 1.424488% for year 6 and onward after that. Use the following information to calculate the value of the equity on a per-share basis. a. Assume that the company currently has $660 million of net PP&E. b. The company currently has $220 million of net working capital. c. The company has operating margins of 12 percent and has an effective tax rate of 28 percent. d. The company has a weighted average cost of capital of 10 percent. This is based on a capital structure of two-thirds equity and one-third debt. e. The firm has 2 million shares outstanding. A Do not round intermediate calculations. Round your answer to the nearest cent

1) A firm that is currently unlevered has WACC = rS = 10%/year. This company plans to do a recapitalization by issuing debt and repurchasing equity. After the recapitalization, the debt-to-equity (D/E) ratio will be 0.5. If the cost of debt, rD, is 6%, what will be rS after the recapitalization?  2) A firm with wD = 0.35 and wS = 0.65 plans to issue another $100 million of permanent debt. The firm's tax rate is 21%. The bonds will be issued at par with coupon rate = rD = 7%/year. The firm's WACC is 11%/year.  By how much will the new debt change the value of the firm, and who will receive this value? A) Firm value will increase by $21 million, and all $21 million will go to the shareholders B) Firm value will increase by $9 million, and 35% will go to the bondholders, 65% to the shareholders C) Firm value will increase by $18.6 million, and 35% will go to the bondholders, 65% to the stockholders D) Firm value will increase by $21 million, and all $21 million will go to the…

Suppose Bank A has $35 million in rate-sensitive assets, $70 million in fixed rate assets, $70 million in rate sensitive liabilities, and $35 million in fixed rate liabilities and equity capital. If you had believed that rates were going to rise by 2 percentage points (before it actually happened), explain how (if at all) you could have altered Bank A’s balance sheet and changed its interest rate risk exposure to improve its subsequent profit performance.