Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

1) Firms X & Y sell Bison Hot Dogs. Firm Y’s capital structure is different – it has $ 10 million; 5% coupon bonds. EBIT for firms is $ 2 million. Cost of equity for A is 10%.

a) In a Modigliani and Miller (MM) world – estimate the value for A & B.

b) find out what shareholders need as the return for A & B.

2) Gold Inc labs recover gold from printed circuit boards. It has developed new equipment for reason. The data is given below.

(i) Equipment costs= $250,000

(ii) It will cost= $200,000 per year to run

(iii) It has an economic life of 5 years and is depreciated using straight-line method

(iv) It will recover 300 ounces of gold per year

(v) The present price of gold= $600 per ounce and it expected to increase at a rate 4% per year for the foreseeable future

(vi) The tax rate is 30%

(vii) The cost of capital is 8%. Determine NPV of the equipment?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M914417

Have any Question? 


Related Questions in Basic Finance

Diamond inc recently paid a 110 dividend future dividends

Diamond, Inc recently paid a $1.10 dividend. Future dividends are projected at $1.14, $1.18, $1.22, and $1.25over the next four years, respectively. Beginning five years from now, the dividend is expected to increase by ...

1 what communications media have traditionally been used to

1. What communications media have traditionally been used to communicate disaster information? 2. Name several types of new media, and describe how they have been used in recent years in communicating disaster informatio ...

1 budgets of government entitiesare integrated with the

1. Budgets of government entities: Are integrated with the financial accounting system. Enable governments to demonstrate compliance with laws and to communicate performance effectiveness. Are adopted by governments afte ...

The alpha company has issued a total of 15000000 shares of

The Alpha Company has issued a total of 15,000,000 shares of common stock at par(its value to the firm is $15,000,000. The dividend yield is 7%. The company also has $5,000,000 of bonds(also sold at par) with a coupon ra ...

1 when would you calculate a multiple correlation

1. When would you calculate a multiple correlation coefficient? What do you learn if you square a multiple correlation? 2. How does a cross-lagged panel correlation design provide evidence to support a causal link betwee ...

1 what are placebo effects and how can they be avoided2

1. What are placebo effects, and how can they be avoided? 2. What are demand characteristics, and how can they be avoided? 3. In what ways may experimenters unwittingly communicate their expectations to research particip ...

1 what are the major strategic differences between

1. What are the major strategic differences between marketing domestically and marketing internationally? 2. Discuss the importance of marketing research for international marketing. What challenges face marketing resear ...

For this question i had been using spirit airlines 2015 10k

For this question I had been using Spirit AIrlines 2015 10k report on module 1. However, I'm a bit lost as to how to read it in terms of bonds. Can someone explain this to me?  http://ir.spirit.com/financials.cfm  Using ...

Now consider the outer loop of fig 910 consisting of blocks

Now consider the outer loop of Fig. 9.10, consisting of blocks B2, B3, B4, and B5. Let g be the transfer function for the loop body, from the entry of the loop at B2 to its exit at B5. Let i measure the number of iterati ...

1 what are social institutions what effects do social

1. What are social institutions? What effects do social institutions have on people? 2. Discuss the three most important influences of social institutions. Give some examples of each of the three forms of influence. 3. D ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen