Company decided to change its capital structure. Long term loan will be increased from 3 mio to 20 mio. Interest rate for loan is 9% annually. Additional laon will be used for share bayback. Company has 2 mio shares in the marekt with current price of 17.00 euros. Find a break-even EBIT level Find EPS with break-even EBIT
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Company decided to change its capital structure. Long term loan will be increased from 3 mio to 20 mio.
Interest rate for loan is 9% annually. Additional laon will be used for share bayback.
Company has 2 mio shares in the marekt with current price of 17.00 euros.
Find a break-even EBIT level
Find EPS with break-even EBIT
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- Company decided to change its capital structure. Long term loan will be increased from 3 million to 20 million.Interest rate for loan is 9% annually. Additional loan will be used for share payback.Company has 2 million shares in the market with current price of 17.00 euros. Find a break-even EBIT levelFind EPS with break-even EBIT Solutions and Formulas in Excel! Please answer fast i give you upvote.The Barrell Company is approached by a bank that offers to implement a lockbox system of receipts for the firm. If the new system is implemented, it will reduce float by 6 days per year. If Barrell's cost of capital is 11.5% and its annual sales are expected to be P10,00,000, then what is the maximum amount that Barrell is willing to pay for the lockbox system? O P164,438.56 O P18,904.11 O P1,150,000.00 O P1,890.41Suppose you had the following propositions of returns from two companies W and Y: Company Returns (OMR) Comments W 475 Company W proposes to give OMR 475 today Y 550 Company Y proposes to give you OMR 550 but after 2 years You also know that the Interest Rate is by 10%. Question: In which company do you choose to invest your money and why? (Use two formulas (ways) and also use Tables to make sure your answers are correct).
- Assume that You are risk manager at BIC Investment. BIC firm wants to fixcurrency rate for 5.000.000 USD export transaction in 120 days and 3.000.000 EURO importtransaction in 180 days from AC Bank. Find bid and ask forward rate of AC Bank by usingexchange rates and interest rates below USD/TL: 5,8725/5,9850 EURO/TL: 6,6700/6,7250 USD faiz oranı: 4,50/5,00EURO Faiz Oranı: 6,25/7,50 TLLIBOR: 24,25/26,00Please solve this question, with all given parts. Q1:- Atlas Corporation wants to determine the optimal level of current assets that should be kept in the next year. The company is currently undergoing expansion, after which sales are expected to increase approximately by PKR 1 million. The company wants to maintain a 40% equity ratio and its total fixed assets are of PKR 1 million. Atlas’s interest rate is currently 8% on both short-term and longer-term debt (which the firm uses in its permanent structure). The company must choose between three strategies and decide which one is better. (1) a lean and mean policy where current assets would be only 35% of projected sales, (2) a moderate policy where current assets would be 40% of sales, and (3) a lenient policy where current assets would be 50% of sales. Earnings before interest and taxes should be 10% of total sales, and the federal-plus-state tax rate is 35%. What is the expected return on equity under each current asset level? In…A reputable company plans to place an investment with a private equity firm with an amount of Php 10M for 2023. Considering all the risks involved, the prevailing discount rate is 12% and with a revenue stream/dividends below: 2023 995,000.00 2024 1,380,000.00 2025 1,575,000.00 2026 1,930,000.00 2027 2,954,000.00 2028 3,408,644.00 2029 6,354,941.00 Find the NPV. Group of answer choices No choice given Php10,700,800 Php 12,570,638 Php 10,611,838 Php 9,800,338
- 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 $1,227,480The current value of a firm is $1,400. Te firm has $1,000 in pure debt due in one year and the risk-free rate is 6%. The firm's asset will be worth either $1,200 or $1,500 in one year. What is the interest rate on the debt? A. 6.0% B. 7.0% C. 7.5% D. 11.0% E. 13.0%Consider two hypothetical firms: Firm U, which uses no debt financing, and Firm L, which uses €10,000 of 12 percent debt. Both firms have €20,000 in assets, a 40 percent tax rate, and an expected EBIT of €3,000. Construct partial income statements, which start with EBIT, for the two firms. Firm U Firm L Assets €20,000 €20,000 Equity €20,000 €10,000 EBIT € 3,000 € 3,000 INT (12%) ? ? EBT ? ? Taxes (40%) ? ? NI € ? € ?
- A company needed ghc 1000 to finance its activities. The firm can financed this expenditure either by bonds or equity. Interest rate on bonds is 10%. The company can earn ghc 160 in good years and ghc80 in bad years. Assuming the firm faces equal probability of good and bad years; i What will be the stream of returns on both bonds and equity if the company chooses the following financing options a 100% equity financing b 50% equity financing c 20% equity financing d 0% equity financing ii Estimate the equity risk associated with each option in (i) iii As an investor who wants to purchase a share in the company, which financing option will make you purchase the stock. Why????Problem C: Liquidity RatiosABC has P400,000 cash, P200,000 short‐term investments, P500,000 receivables, and P900,000 inventories. It has trade payables ofP600,000 and short‐term loans of P900,000. It is planning to acquire another short‐term loan. However, the first loan requires ABCto maintain a minimum current ratio of 125%.Required:10. Current ratio if ABC borrowed P300,00011. Current ratio if ABC borrows P600,00012. Maximum loan amount that ABC can borrow*Answer in percent rounded off to two decimal places, e.g. 125.33 for 125.33%.Companies A and B are able to receive the following rates per annum on a $10 million, 5-year investment, as a function of whether the investment returns a fixed or floating rate of interest: Fixed rate Floating rate Company A 5.0 Company B | 5.6 SOFR+20 basis points SOFR Company A requires a fixed-rate investment and company B requires a floating-rate invest- ment. Design a swap that will net a bank, acting as an intermediary, 30 basis points and will appear equally attractive to each company.