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1. Create a table showing gross capex for each year Speakco is in the music industry and is highly profitable and you have been asked
1. Create a table showing gross capex for each year
Speakco is in the music industry and is highly profitable and you have been asked to assess a new division: holographic immersion concert experiences. The company is diversified, and equity holders require a 11.5% return for the company as a whole. There are 900,000 outstanding shares with a share price of 540.00. There are 500,000 bonds (face value=1000S/bond) issued with a coupon rate of 4 percent paid semiannually, 10 years left to maturity, The bond is currently trading at 950.55 dollars There are no dominant competitors in this space. However, the is one all-equity company Nirvana-tech that has a market capitalization of 40 million. Speakco finance staff has determined that it would cost about $9.8 million to build out an efficient plant and will require 700 thousand. If construction were to begin in in the beginning of 2021, the plant could be finished by the end of the year the operation will start sales in the beginning of 2022. In answering the questions given below make the following assumptions for Speakco: Growth rate for division after 2025=2 Risk free rate 2.6% Market risk premium Tax rate 21% Beta of Nirvana 1.3 8% Proposal Projections + PROJECTED INCOME in thousands of dollars) 202 202 202 202 202 202 500 12.00 14.250 14,500 14,75 Units sold Price per unit s S S ss Revenues (thousands) COGS Gross profit SG&A Depreciation Pretax operating profit 3,660 3.190 833 (363) 12,642 7,725 787 4,130 S 16.663 8.794 758 7,011 18.820 9.933 746 8.141 S 748 IS PROJECTED BALANCE 202 202 0 202 2 202 3 202 4 202 5 S 600S Assets Cash Accounts receivable Inventories Other current assets 200S 2.415 7025 5,850 9,790 1300 2.00 5.063 600 926 S 7.719 12,919 1860 1.046S 8.709 14.575 2100 9.83 16.45 2400 Net plant and equipment 9800 7019 7218 7,535 7.96 Liabilities Accounts payable 2.000 4800 6100 7200 7800 Speakco is in the music industry and is highly profitable and you have been asked to assess a new division: holographic immersion concert experiences. The company is diversified, and equity holders require a 11.5% return for the company as a whole. There are 900,000 outstanding shares with a share price of 540.00. There are 500,000 bonds (face value=1000S/bond) issued with a coupon rate of 4 percent paid semiannually, 10 years left to maturity, The bond is currently trading at 950.55 dollars There are no dominant competitors in this space. However, the is one all-equity company Nirvana-tech that has a market capitalization of 40 million. Speakco finance staff has determined that it would cost about $9.8 million to build out an efficient plant and will require 700 thousand. If construction were to begin in in the beginning of 2021, the plant could be finished by the end of the year the operation will start sales in the beginning of 2022. In answering the questions given below make the following assumptions for Speakco: Growth rate for division after 2025=2 Risk free rate 2.6% Market risk premium Tax rate 21% Beta of Nirvana 1.3 8% Proposal Projections + PROJECTED INCOME in thousands of dollars) 202 202 202 202 202 202 500 12.00 14.250 14,500 14,75 Units sold Price per unit s S S ss Revenues (thousands) COGS Gross profit SG&A Depreciation Pretax operating profit 3,660 3.190 833 (363) 12,642 7,725 787 4,130 S 16.663 8.794 758 7,011 18.820 9.933 746 8.141 S 748 IS PROJECTED BALANCE 202 202 0 202 2 202 3 202 4 202 5 S 600S Assets Cash Accounts receivable Inventories Other current assets 200S 2.415 7025 5,850 9,790 1300 2.00 5.063 600 926 S 7.719 12,919 1860 1.046S 8.709 14.575 2100 9.83 16.45 2400 Net plant and equipment 9800 7019 7218 7,535 7.96 Liabilities Accounts payable 2.000 4800 6100 7200 7800Step by Step Solution
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