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Analyzing Cash Returned to Stockholders Question 3 FCFE = Net Income – Net Capital Expenditure -Change in working Capital+ Change in debt Initial working capital Working capital after the...

Chapter 10 Questions Question 1 Question 1 Price before dividend Price after dividend Dividend Tax on capital gains Tax on ordinary income 50 46.5 5 0.7 58.00% To calculate the marginal tax rate on...

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...

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...

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...