Market value of No Leverage, Inc. Round your answer to the nearest dollar. $    Market value of High Leverage, Inc. Round your answer to the nearest dollar. $    Present value of the tax shield to High Leverage, Inc. Round your answer to the nearest dollar. $

Taking the corporate taxes into account, if there is no possibility of financial distress, a firm can maximize its market value when the: firm uses a debt-equity ratio of 1.0. firm uses the maximum amount of debt in its capital structure. firm uses no debt in its capital structure. corporate tax rate approaches 100%.

Do not provide solution in imge format. and also do not provide plagarised content otherwise i dislike.   Consider a firm with an EBIT of $865,000. The firm finances its assets with $2,650,000 debt (costing 7.9 percent and is all tax deductible) and 550,000 shares of stock selling at $6.00 per share. To reduce the firm's risk associated with this financial leverage, the firm is considering reducing its debt by $1,000,000 by selling an additional 350,000 shares of stock. The firm's tax rate is 21 percent. The change in capital structure will have no effect on the operations of the firm. Thus, EBIT will remain at $865,000. Calculate the change in the firm's EPS from this change in capital structure. Note: Do not round intermediate calculations and round your final answers to 2 decimal places. EPS before EPS after Difference

Hawar International is a shipping firm with a current share price of $4.50 and 10 million shares outstanding. Suppose Hawar announces plans to lower its corporate taxes by borrowing $10 million and repurchasing shares. a. With perfect capital​ markets, what will the share price be after this​ announcement? b. Suppose that Hawar pays a corporate tax rate of 40%​, and that shareholders expect the change in debt to be permanent. If the only imperfection is corporate​ taxes, what will the share price be after this​ announcement? c. Suppose the only imperfections are corporate taxes and financial distress costs. If the share price rises to $4.55 after this​ announcement, what is the PV of financial distress costs Hawar will incur as the result of this new​ debt?       Question content area bottom Part 1 a. With perfect capital​ markets, what will the share price be after this​ announcement?   With perfect capital​ markets, the share price will be ​$enter your response here per share

Widget Corp. currently is financed with 10% debt and 90% equity. However, its CFO has proposed that the firm issue new long-term debt and repurchase some of the firm’s common stock. Its advisers believe that the long-term debt would require a before-tax yield of 10%, while the firm’s basic earning power is 14%. The firm’s operating income and total assets will not be affected. The CFO has told the rest of the management team that he believes this move will increase the firm’s stock price. If Widget Corp. proceeds with the recapitalization, which of the following items are also likely to increase? Check all that apply.   Basic earning power (BEP) Cost of equity (rs) Net income Cost of debt (rd) Return on assets (ROA)

Kendall Corporation has no debt but can borrow at 6.5 percent. The firm’s WACC is currently 10 percent, and there is no corporate tax. What is the company’s cost of equity? Note: Do not round intermediate calculations and enter your answer as a percent rounded to the nearest whole number, e.g., 32. If the firm converts to 10 percent debt, what will its cost of equity be? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. If the firm converts to 45 percent debt, what will its cost of equity be? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. What is the company’s WACC in parts (b) and (c)? Note: Do not round intermediate calculations and enter your answers as a percent rounded to the nearest whole number, e.g., 32.

Jordan, Corp., has debt outstanding with a market value of $3 million. The value of the firmwould be $X million if it were entirely financed by equity. The company also has 360,000shares of stock outstanding that sell at $50 per share. The corporate tax rate is 30 percent. Theexpected bankruptcy cost is 0.9 million. If there is no other market friction like agencycost/benefit, what is X?

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Explain  well with proper  step by step  and type  the answer.