blue Industries has an EBIT of $12 million per year forecast in perpetuity. blue’s cost of equity is 15% and its tax rate is 28%. If Blue Industries borrows $30 million, what will be the value of the firm? Group of answer choices $76.4 million $66.0 million $80.0 million $57.6 million $30.8 million
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blue Industries has an EBIT of $12 million per year
Group of answer choices $76.4 million
$66.0 million
$80.0 million
$57.6 million
$30.8 million
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- PLz use excel show formula and explain fully the last question the implications of borrowing Meyer & Co. expects its EBIT to be $97,000 every year forever. The firm can borrow at 8 percent. The company currently has no debt, and its cost of equity is 13 percent. The tax rate is24 percent. What is the value of the firm? What is the value if the company borrows $195,000 and uses the proceeds to repurchaseshares? What is the cost of equity after recapitalization? What is the WACC? What are the implications of the firm’s decision to borrow?plz use excel and show formula Meyer & Co. expects its EBIT to be $97,000 every year forever. The firm can borrow at 8 percent. The company currently has no debt, and its cost of equity is 13 percent. The tax rate is 24 percent. What is the value of the firm? What is the value if the company borrows $195,000 and uses the proceeds to repurchase shares? What is the cost of equity after recapitalization?What is the WACC? What are the implications of the firm’s decision to borrow?Cede & Co. expects its EBIT to be $163000 every year forever. The company can borrow at 8 percent. The company currently has no debt and its cost of equity is 10 percent. The tax rate is 23 percent. If the company borrows $185,000 and uses the proceeds to buy back equity, what is the weighted average cost of capital after the recapitalisation is complete? Group of answer choices 9.67% 15.13% 14.32% 8.17%
- K SIROM Scientific Solutions has $10 million of outstanding equity and $5 million of bank debt. The bank debt costs 5% per year. The estimated equity beta is 2. If the market risk premium is 8% and the risk-free rate is 5%, compute the weighted average cost of capital if the firm's tax rate is 30%. OA. 15.17% OB. 17.44% O C. 15.93% OD. 16.68% ...Stevenson's Bakery is an all-equity firm that has projected perpetual EBIT of $195,000 per year. The cost of equity is 13.9 percent and the tax rate is 21 percent. The firm can borrow perpetual debt at 5.9 percent. Currently, the firm is considering converting to a debt–equity ratio of 1.05. What is the firm's levered value? MM assumptions hold. Multiple Choice $841,727 $1,092,192 $757,554 $927,952 $1,227,480A firm requires an investment of $30,000 and will return $35,500 after 1 year. If the firm borrows $20,000 at 7% what is the return on levered equity? O A. 41.0% O B. 32.8% OC. 57.4% O D. 49.2%
- A firm will earn a taxable net return of $500 million next year. If it took on debt today, it would have to pay creditors\varepsilon(rDebt) = 5% + 10% x wDebt2. Thus, if the firm has 100% debt, the financial markets would demand 15% expected rate of return. Further, assume that the financial markets will lend the firm capital at this overall net cost of 15%, regardless of how the firm is financed. The firm is in the 25% marginal tax bracket. 1. If the firmis fully equity-financed, what is its value? 2. Using APV, if the firm is financed with equal amounts of debt and equity today, what is its value? 3. Using WACC, if the firm is financed with equal amounts of debt and equity today, what is its value? 4. Does this firm have an optimal capital structure? If so, what is its APV and WACC?Stevenson's Bakery is an all-equity firm that has projected perpetual EBIT of $159,000 per year. The cost of equity is 11.5 percent and the tax rate is 21 percent. The firm can borrow perpetual debt at 6.3 percent. Currently, the firm is considering converting to a debt–equity ratio of .69. What is the firm's levered value? MM assumptions hold. Multiple Choice $1,185,911 $962,907 $898,696 $1,106,128 $808,826 Please answer fast i give upvotePlz use excel Meyer & Co. expects its EBIT to be $97,000 every year forever. The firm can borrow at 8 percent. The company currently has no debt, and its cost of equity is 13 percent. The tax rate is 24 percent. What is the value of the firm? What is the value if the company borrows $195,000 and uses the proceeds to repurchase shares? What is the cost of equity after recapitalization?What is the WACC? What are the implications of the firm’s decision to borrow?
- Kale Inc. forecasts the free cash flows to the firm (in millions) shown below. If the weighted average cost of capital is 11.0%, cost of equity is 16%, and FCF to the Firm is expected to grow at a rate of 5.0% after Year 2, what is the firm’s total corporate value, in millions?. Year 1 2 Free cash flow -P30 P130 Group of answer choices P1,606 P1,925 P1837 P1,529 P1,686 P1,770 P1,456 P993A new business requires a $20,000 investment today and will generate a one-time cash flow of $25,000 after one year. The business will be financed with 50% equity and 50% debt. If the firm can borrow at 7%, what is the return on levered equity? 18% 39% O 7% O 43%Exxo Mobile expects an EBIT of $20,000 every year in perpetuity. The firm currently has no debt, and its cost of equity is 15 percent. The tax rate is 30 percent. The firm plans to borrow money to repurchase its stock such that the debt- value ratio after the restructuring becomes 50 percent permanently. What is the firm value if the firm borrows at 8 percent? Group of answer choices $135,922.33 $93,333.33 $156,862.75 $109,803.92