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Given the information here, calculate the shareholder value for Fitch Inc. Cost of Capital 12% Most recent year's sales $2,000 Debt $250 Operating Profit
Given the information here, calculate the shareholder value for Fitch Inc. Cost of Capital 12% Most recent year's sales $2,000 Debt $250 Operating Profit Margin 12% Assets/sales 40% Tax rate 40% Forecasted sales growth: 1 to 2 years 14% 3 to 5 years 9% 6 to infinity 3% The company is evaluating a project proposal requiring additional capital of P350,000 so as to increase its operating income by P200,000. Two alternatives have been presented: 1. Issue additional 1,750 shares of capital stock at the market price of P200 per share 2. Borrow 350,000 from a bank at 18% The tax rate is 32%
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