Morgan Industries is an all-equity firm with 50 million shares outstanding. Iota has $200 million in cash and expects future free cash flows of $75 million per year. Management plans to use the cash to expand the firm's operations, which in turn will increase future free cash flows by 12%. Morgan's cost of capital is 10% and assume that capital markets are perfect. •    What is the value of Morgan Industries if they use the $200 million to expand? •    What is the price per share of Morgan Industries if they use the $200 million to expand?

ETA is an all-equity firm with 50 million shares outstanding. It has $200 million in cash and expects future free cash flows of $80 million per year (with the next cash flow occurring in exactly one year's time). The Board of ETA can either use all excess cash to repurchase shares or for expansion. Suppose that ETA is able to invest the $200 million excess cash into a project that will increase the future free cash flows by 30% in year 1 (and cash flows stay constant at that level after year 1). This investment will not alter the risk of the business. ETA's cost of capital is 10% and assume that capital markets are perfect. If you were advising the board, what course of action would you recommend? Should ETA use the $200 million to expand or repurchase shares? Required: (a) Firm value with expansion is $ million. Note: Please provide your answer as an integer in million in the format of xxxx (for example, if the answer is $1,234.5 million, type in 1235). (b) If the board decides to…

A firm is considering two mutually exclusive projects, X and Y, with the following cash flows: 0 1 2 3 4 Project X -$1,000 $100 $320 $400 $750 Project Y -$1,000 $1,100 $ 110 $45 $55 The projects are equally risky, and their WACC is 8 %. What is the MIRR of the project that maximizes shareholder value? Do not round intermediate calculations. Round your answer to two decimal places.

Suppose your company needs $17 million to build a new assembly line. Your target debt- equity ratio is .75. The flotation cost for new equity is 10 percent, but the flotation cost for debt is only 7 percent. Your boss has decided to fund the project by borrowing money because the flotation costs are lower and the needed funds are relatively small. a. What is your company's weighted average flotation cost, assuming all equity is raised externally? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the true cost of building the new assembly line after taking flotation costs into account? (Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to the nearest whole dollar amount, e.g., 1,234,5667.) a. Flotation cost b. Amount raised %