Chapter 7 Questions Question 6 Question 6 a class A stock Class A share price Class B stock Class B share price Value of Equity 50,000 100 100,000 90 14000000 b Value of debt Value of equity Debt...
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Chapter 6 Questions Question 3 Question 3 a Initial investment Per year cost Period Opportunity Cost NPV EAC $ (12,000.00) $ (5,000.00) Infinite 10% $ (17,000.00) $ (1,700.00) b Initial...
Chapter 5 Questions Question 1 1 Average Book Value and EBIT for Each Year Year Opening Book Value (A) Annual Depreciation [(25 – 10)/5] (B) Closing Book Value (C = A – B) Average...
Risk and Return Analysis Assessment of the riskiness of Tesla’s stock Tesla’s stock is significantly risky because it has a high beta. Tesla’s beta is 1.47, indicating the...
Chapter 3 Questions Question 1 The following table lists the stock prices for Microsoft from 1989 to 1998. The company did not pay any dividends during the period Year Price (dollars) 1989 1.20 1990...
Chapter 2 Questions Companies outside the United States often have two classes of stock outstanding. One class of shares is voting and is held by the incumbent managers of the firm. The other class...