If a company has an enterprise value of $1500 million, and equity value of $1200 million. Which of the followings are right? (two correct answers) the company has more debt than cash. the company has more cash then debt. the company has a net debt $300 million. the company has a debt $300 million. the company has a net debt -300 million.

If a company has an enterprise value of $1500 million, and equity value of $1200 million. Which of the followings are right? (two correct answers) the company has more debt than cash. the company has more cash then debt. the company has a net debt $300 million. the company has a debt $300 million. the company has a net debt -300 million.

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Description: If a company has an enterprise value of$1500 million, and equity value of $1200million. Which of the followings are right?(two correct answers)the company has more debt than cash.the company has more cash then debt.the company has a net debt $300 mi

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 KCCO, Inc., has current assets of $5,300, net fixed assets of $24,900, current liabilities of $4,600, and long-term debt of $10,300. What is the value of the shareholders' equity account for this firm? How much is net working capital? 4 Current assets $ 5,300 24,900 6 7 Net fixed assets 8 Current liabilities 2$ 4,600 10,300 9 10 Long-term debt 11 12 13 Complete the following analysis. Do not hard code values in your calculations. 14 Balance sheet 15 Current assets |Current liabilities Long-term debt Owners' equity 16 17 Net fixed assets 18 ? 19 20 21 Total assets Total liabilities & equity 22 Sheet1 READY 曲 + 100% Attempt(s) 3/3 Hint 3.
Give typing answer with explanation and conclusion The management of Tarantulagoodies is considering a reduction in the corporation’s debt ratio. The following information is available: Debt: $10,000,000, kd=7.5%, tax-rate=30% Common Stock: $23,000,000, b=1.2, RF=3.5%, E(RM)=10%. The issuance of $5,000,000 in common stock and repurchase of debt in that same amount is expected to result in the reduction in kd to7%. The impact of the action on the cost of equity is to be determined. Should management pursue the change in debt ratio? Why/why not?
Meyer Inc's total invested capital is $610,000, and its total debt outstanding is $185,000. The new CFO wants to establish a total debt to total capital ratio of 55%. The size of the firm will not change. How much debt must the company add or subtract to achieve the target debt to capital ratio?
The market value of the equity of Thompson, Inc., is $582,000. The balance sheet shows $21,000 in cash and $192,000 in debt, while the income statement has EBIT of $93,000 and a total of $137,000 in depreciation and amortization. What is the enterprise value-EBITDA multiple for this company?
Assume ABC Corporation is a multinational company with the following financial information: Market value of equity (E): $500 million Market value of debt (D): $300 million Market value of preferred stock (PS): $50 million Cost of equity (Re): 10% Cost of debt (BTrd): 5% Corporate tax rate (Tc): 25% Cost of preferred stock ( Rps): 8% a. Calculate the WACC for ABC Corporation. Needs to be done in Excel
A company begins with the following simple balance sheet: $10 million in real assets; $1 million cash; $5.5 million each in owners’ equity and debt. Which of the following actions will decrease a company’s leverage ratio? Choose two Use half of the cash from the balance sheet to purchase equipment Borrow an additional $1 million and purchase equipment Raise an additional $1 million in equity to purchase equipment Raise an additional $1 million in equity to pay off debt
A company has $20 billion of sales and $1 billion of net income. Its total assets are $10 billion. The company’s total assets equal total invested capital, and its capital consists of half debt and half common equity. The firm’s interest rate is 5% and its tax rate is 40%. Use this as a guide for computing EBIT (work up the firm's income statement): EBIT Less: Interest EBT Less: Taxes Taxes (40%) Net Income Question: What is its ROIC?
Beranek Corp has $800,000 of assets (which equal total invested capital), and it uses no debt—it is financed only with common equity. The new CFO wants to employ enough debt to raise the total debt to total capital ratio to 40%, using the proceeds from borrowing to buy back common stock at its book value. How much must the firm borrow to achieve the target debt ratio? a. $571,429 b. $320,000 c. $1,120,000 d. $160,000 e. $480,000
Which of the following would affect shareholders' equity? Group of answer choices A company borrows $100 million and buys $100 million in equipment. A company sells $100 million in assets for $100 million cash. A company receives payment for $100 million in accounts receivable. A company pays $100 million to shareholders as a dividend.
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Let It Be, Inc. has shareholders' equity of $150,800. The firm owes a total of $144,000 of which 40 percent are current liabilities. The firm net fixed assets of $190,600. What is the amount of the net working capital?

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