Phoenix Industries has twelve million shares outstanding, generates free cash flows of $75 million each year, and has a cost of capital of 12%. It also has $50 million of cash on hand. Phoenix wants to decide whether to repurchase stock or invest the cash in a project that generates free cash flows of $3 million each year. Should Phoenix invest or repurchase the shares? A) Repurchase B) Invest C) Indifferent between options D) Cannot say for sure

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The management of LTTP Corp. is preparing for issuing equity to fund a new project. Rights offeris used. The company has determined that the ex-rights price would be $53. The current price is $58per share, and there are 10 million shares outstanding. The rights offer would raise a total of $45million. What is the subscription price?

Kohwe Corporation plans to issue equity to raise $50 million to finance a new investment.   After making the investment, Kohwe expects to earn free cash flows of $10 million each year.   Kohwe currently has 5 million shares outstanding, and has no other assets or opportunities. Suppose the appropriate discount rate for Kohwe's future free cash flows is 8%, and the only capital market imperfections are corporate taxes and financial distress costs.   a. What is the NPV of Kohwe's investment?   b. What is Kohwe's share price today?   Suppose Kohwe borrows the $50 million instead. The finn will pay interest only on this loan each year, and maintain an outstanding balance of $40 million on the loan. Suppose that Kohwe's corporate tax rate is 35%, and expected free cash flows are still $9 million each year.   c. What is Kohwe's share price today if the investment is financed with debt?   Now suppose that with leverage, Kohwe's expected free cash flows wiH decline to $8 million per year due…

The management of LTTP Corp. is preparing for issuing equity to fund a new project. Rights offeris used. The company has determined that the ex-rights price would be $53. The current price is $58per share, and there are 10 million shares outstanding. The rights offer would raise a total of $45million. What is the subscription price? can you handwrite it please

A firm has 10 million shares outstanding with a current market price of P20 per share. There is one investment project available to the firm. The initial investment of the project is P20 million, and the NPV of the project is P10 million. What will be the firm’s stock price if capital markets fully reflect the value of undertaking the project? a.P19b.P20c.P21d.P22

Kohwe Corporation plans to issue equity to raise $50.7 million to finance a new investment. After making the investment, Kohwe expects to earn free cash flows of $10.4 million each year. Kohwe's only asset is this investment opportunity. Suppose the appropriate discount rate for Kohwe's future free cash flows is 7.7%, and the only capital market imperfections are corporate taxes and financial distress costs. a. What is the NPV of Kohwe's investment? b. What is the value of Kohwe if it finances the investment with equity? a. What is the NPV of Kohwe's investment? The NPV of Kohwe's investment is $ million. (Round to two decimal places.) b. What is the value of Kohwe if it finances the investment with equity? The Kohwe finances stment with equity $ million. (Round decimal places.)

Transco is considering acquiring Tenco.  Tenco's current stock price is $23.  What is the maximum price per share that Transco should offer based on the following data for Tenco:  PV of future cash flows $200 million, 20 million outstanding shares, no debt, and discount rate of 12%?

A company has EBITDA of $100m. If a private equity fund acquires this company in a Leveraged Buy-Out for an EBITDA multiple of 3x, borrowing 50% of the purchase price, and sells the company for a multiple of 5x when the company's EBIDTA has increased to $150m, what will be the value of the equity investment in the company upon exit? What is it as a multiple of the initial equity investment? 8)

Farah’s Fine Fashions (FFF) is considering raising money through a rights offering.  FFF currently has 10 million shares outstanding selling for $22 per share.  Current shareholders will receive one right per share.  Five rights are required to buy one share for $20.  Will the rights be exercised and if so, what is FFF’s new market value if all rights are exercised? Select one: a. The rights will not be exercised. b. $220 million c. $260 million d. $321 million e. None of the above.