Hanover Tech is currently an all equity firm that has 600,000 shares of stock outstanding with a market price of $15.00 a share. The current cost of equity is 21 percent and the tax rate is 39 percent. The firm is considering permanently adding $5,850,000 of debt with a coupon rate of 11 percent to its capital structure. The debt will be sold at par value. What is the levered value of the equity? Round your answer to the nearest whole dollar, but don't include the $ sign. HINT: First get the value of the unlevered firm. Then calculate the value of the levered firm. The total value of any firm is the value of the debt plus the value of the equity. Numeric Response I

Abercrombie​ & Fitch's common stock pays a dividend of $3.00. It is currently selling for $30.78. If the​ firm's investors require a return of 15 percent on their investment from buying Abercrombie​ & Fitch​ stock, what growth rate would Abercrombie​ & Fitch have to provide the​ investors?

Boston Company has just paid dividends of $2.5 per share, which the company projects will grow at a constant rate of 5 percent forever. If Boston Company’s shareholders require 15 percent rate of return, what is the price of its common stock? Can you show the excel formula?

Bushwhacker Mowing needs $360 million to support growth. If it issues new common stock to raise the funds, the issuing cost charged by the investment banker will be 4 percent. Additional costs associated with the issue will total $288,000. If Bushwhacker can issue stock at $60 per share, how many shares of common stock must be issued so that it has $360 million after flotation costs? Show how much of the issue will consist of flotation costs and how much Bushwhacker will receive after flotation costs are paid.

Zang Industries has hired the investment banking firm of Eric, Schwartz, & Mann (ESM) to help it go public. Zang and ESM agree that Zang’s current value of equity is $60 million. Zang currently has 4 million shares outstanding and will issue 1 million new shares. ESM charges a 7% spread. What is the correctly valued offer price, rounded to the nearest penny? How much cash will Zang raise net of the spread (use the rounded offer price)?

Becker industries is considering an all equity capital structure against one with both debt and equity.  The all equity capital structure would consist of 34000 shares of stock.  The debt and equity option would consist of 17000 shares of stock plus $265000 of debt with an interest rate of 8 percent.  What is the break even level of earnings before interest and taxes between these two options? Ignore taxes

Covan, Inc. is expected to have the following free cash flow: a. Covan has 8 million shares outstanding, $3 million in excess cash, and it has no debt. If its cost of capital is 11%, what should be its stock price? b. Covan adds its FCF to cash, and has no plans to add debt. If you plan to sell Covan at the beginning of year 2, what is its expected price? c. Assume you bought Covan stock at the beginning of year 1. What is your expected return from holding Covan stock until year 2? a. Covan has 8 million shares outstanding, $3 million in excess cash, and it has no debt. If its cost of capital is 11%, what should be its stock price? The stock price should be $ (Round to the nearest cent.) A b. Covan adds its FCF to cash, and has no plans to add debt. If you plan to sell Covan at the beginning of year 2, what is its expected price? If you plan to sell Covan at the beginning of year 2, its price should be $ (Round to the nearest cont.) c. Assume you bought Covan stock at the beginning of…

West Central plc has been quoted on the London Stock Exchange for 10 years. Analysis of data from the last 10 years suggests that the company has an equity beta of 1.20. The company has 60 % of equity and 40 % of debt. The current market value of West Central plc is $ 100 million.  The company is going to undertake a project that has a similar beta to its average assets. The project is expected to be financed entirely by equity. As a result of this financing option and the undertaking of the project, the company will have 70 % of equity and 30 % of debt measured at market values. The risk-free rate is expected to be 5 % per annum and the market is expected to return 10 % per annum. West Central plc pays corporate tax at 40 %. The company's debt is thought to be risk-free. a ) Calculate the company's beta before the proposed project. b) Calculate the company's market value after the proposed project and the financing option. c) Calculate the Net Present Value of the project. d)…