Question
Question 31 A firm has a tax rate of 35%, an unlevered rate of return of 12%, total debt of $2,000, and an EBIT of
Question 31
A firm has a tax rate of 35%, an unlevered rate of return of 12%, total debt of $2,000, and an EBIT of $150.00. What is the unlevered value of the firm?
Select one:
a. $1,532
b. $696
c. $813
d. $1,161
e. $1,346
Question 32
A firm that only accepts projects for which the IRR is greater than the firm's required return will, on average, neither create nor destroy wealth for its shareholders.
Select one:
True
False
Question 33
This morning, Alicia bought a ten-year 7% coupon bond that pays interest semi-annually. She paid $994 for a $1,000 bond. If the market interest rate on this type of bond declines to 6.5% tonight, how much will Alicia receive for her first interest payment?
Select one:
a. $32.31
b. $70.00
c. $69.58
d. $35.00
e. $65.00
Question 34
The Johnson Company just paid an annual dividend of $1.85. How much would you be willing to pay for one share of Johnson Company stock if the dividend remains constant and you require a 9.5% rate of return?
Select one:
a. $18.95
b. $16.00
c. $16.84
d. $19.47
e. $17.78
Question 35
If the rate at which you can invest is positive, the future value of $1 received today equal to $1.
Select one:
True
False
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started