Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

13. Use the following information to calculate the three interest coverage ratios indicated (to one decimal place) EDIT i S1000 Depreciation is $300 Rent Expense

image text in transcribed
13. Use the following information to calculate the three interest coverage ratios indicated (to one decimal place) EDIT i S1000 Depreciation is $300 Rent Expense is $75 Interest Expense is $3s0 EBIT interest Coverage Ratio EBITDA Interest coverage Ratio i - EBITDAR Coverage Ratio 14, ar NOPLAT ;200, g =4%, RONIC = 10%, WACC+ 8%, then continuing value in year t is closest to: a) $667 b) $1,333 c) $3,000 d) 55,000 15. A firm has 4,000,000 shares of stock outstanding with a price per share equal to $22. There are 200,000 bonds outstanding ea priced at $995 each. The cost of equity is 14 percent, the cost of debt is 8 percent, and the corporate tax rate is 34 percent. What the WACC? a) 10.3 percent b) 9.8 percent. c) 8.0 percent. d) 8.8 percent. Answer 16. Researchers have concluded that an appropriate range of the equity market risk premium for use in calculation of the WA valuation models should be 10 to 12 percent. True or False? Answer 17. Some people recommended an adjustment to a firm's beta based on the formula .33+.67* beta. This will: a) Lower beta in all cases b) Increase beta in all cases ) Move the beta toward 1. swer

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Investments

Authors: Zvi Bodie, Alex Kane, Alan Marcus, Lorne Switzer, Maureen Stapleton, Dana Boyko, Christine Panasian

9th Canadian Edition

1259271935, 9781259271939

More Books

Students also viewed these Finance questions

Question

1 Why is job analysis important?

Answered: 1 week ago