Need help with your Discussion

Get a timely done, PLAGIARISM-FREE paper
from our highly-qualified writers!

glass
pen
clip
papers
heaphones

Chapter 8 Questions

Chapter 8 Questions

Sample Answer 

Chapter 8 Questions

Question 1

1a Book Value Debt /Equity = Book Value of Debt /Book Value of Equity  
  Book value of debt Book value of equity D/E  
  2500 2500 1
 
   
  Shares Outstanding Market Price Market Value of Equity
  50  $                                80.00  $                       4,000.00
  Rate Face value of bond Market Value of bond
  0.8  $                           2,500.00  $                       2,000.00
  Market Value( Debt/ Equity 0.5
 
 
1b Book value debt ratio = BV of debt/BV of DEBT + BV of equity
  BV of debt BV of debt BV of equity
   $                        2,500.00  $                           2,500.00  $                       2,500.00 0.5
 
  Market Value debt ratio= MV of debt + Mv of equity
  Market value of debt Market value of debt Market value of equity
   $                        2,000.00  $                           2,000.00 4000 0.333333333
 
 
1c After tax cost of debt = cost of debt*(1-t)
  Bond yield tax rate
  12% 0.4 0.072
 
 
 
1d Cost of Equity= Rf+ B(E(RM)-RF)
Risk free rate beta E(Rm- Rf) Cost of Equity
0.08 1.2 0.055 0.146

Question 2 

Question 2
2a. Market Value debt to equity ratio Initial Investement Initial equity in investement fo project.
0.6667  $                                            100.00  $                                                        66.67
2b Cashflows to equity = net income + depreciation
Net income Depreciation Cashflows to equity
9.6 5 14.6
NPV of CF to equity
Cashflow to Equity Initial investement in the project NPV of CF to equity
 $                                                                     14.60  $                                              66.67 33.33

Question 6

Question 6
6(a) Current beta Tax rate Debt 1 Debt 2 Unlevered beta
1.15 0.4  $                  500,000.00  $  2,000,000.00 0.1796875
6(b) Debt Current cost of equity Cost of equity (debt 1) Growth rate Increase in firm value
 $              2,500,000.00 0.1106 0.1087 0.02  $                   53,551.30
Increase in firm value Shares outstanding Inrease in stock price
 $                    53,551.30 100,000  $                             0.54

ORDER A PLAGIARISM-FREE PAPER HERE

We’ll write everything from scratch

Question 


Week 7 Chapter 8 Questions

Select three formula-driven-problems from Chapter 8 that you wish to showcase and prepare a Microsoft Excel document showing the Excel formulas used to prepare the solution for those problems.

Chapter 8 Questions

Chapter 8 Questions

REMINDER: Part of the grade that you receive on your problems is the utilization of Formulas. Therefore, do not pick problems that only require a narrative!

Have a similar assignment? "Place an order for your assignment and have exceptional work written by our team of experts, guaranteeing you A results."

Order Solution Now

Our Service Charter


1. Professional & Expert Writers: Eminence Papers only hires the best. Our writers are specially selected and recruited, after which they undergo further training to perfect their skills for specialization purposes. Moreover, our writers are holders of masters and Ph.D. degrees. They have impressive academic records, besides being native English speakers.

2. Top Quality Papers: Our customers are always guaranteed of papers that exceed their expectations. All our writers have +5 years of experience. This implies that all papers are written by individuals who are experts in their fields. In addition, the quality team reviews all the papers before sending them to the customers.

3. Plagiarism-Free Papers: All papers provided by Eminence Papers are written from scratch. Appropriate referencing and citation of key information are followed. Plagiarism checkers are used by the Quality assurance team and our editors just to double-check that there are no instances of plagiarism.

4. Timely Delivery: Time wasted is equivalent to a failed dedication and commitment. Eminence Papers are known for the timely delivery of any pending customer orders. Customers are well informed of the progress of their papers to ensure they keep track of what the writer is providing before the final draft is sent for grading.

5. Affordable Prices: Our prices are fairly structured to fit in all groups. Any customer willing to place their assignments with us can do so at very affordable prices. In addition, our customers enjoy regular discounts and bonuses.

6. 24/7 Customer Support: At Eminence Papers, we have put in place a team of experts who answer all customer inquiries promptly. The best part is the ever-availability of the team. Customers can make inquiries anytime.

We Can Write It for You! Enjoy 20% OFF on This Order. Use Code SAVE20

Stuck with your Assignment?

Enjoy 20% OFF Today
Use code SAVE20