Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Beta Coefficient : 2 Cost of Asset : $370.000 Dividend Payout Ratio : 30% EBITDA (Operating Cash Flow) : $1.500.000 Investment Rate : 15% Net

Beta Coefficient : 2 Cost of Asset : $370.000 Dividend Payout Ratio : 30% EBITDA (Operating Cash Flow) : $1.500.000 Investment Rate : 15% Net Working Capital (2021) : $120.000 Net Working Capital (2022) : $150.000 ROE : 20% S&P500 Index Return : 12% Shipping and Installation Cost : $30.000 Tax Rate : 25% Total Firm Bonds Issued : 6000 bonds Total Firm Common Stocks Issued : 15000 shares Treasury-Bill Rate : 2% Useful Life of the Asset : 5 years

a) Compute the FCFF and the Firms value in year 2022.

b) Compute the value of the Firms equity amount and debt amount in year 2022.

c) Compute the value per bond and the value per share of the firm in year 2022.

d) An investor purchased the par-bond of the firm 2 years ago and sold its bond in year 2022. The annual coupon rate of the bond is 10% and the face value of the bond is 1.000$. How much is the holding-period return for the investor?

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

How To Get Out Of Debt And Into Praise

Authors: James T. Meeks

1st Edition

0802429939,1575678314

More Books

Students also viewed these Finance questions

Question

What are the factors that influence make or buy decisions ?

Answered: 1 week ago

Question

Define plant location.

Answered: 1 week ago

Question

Define plant location.

Answered: 1 week ago