The Aggie Company has EBIT of $50,000 and market value debt of $100,000 outstanding with a 9% coupon rate. The cost of equity for an all equity firm would be 14%. Aggie has a 35% corporate tax rate. Investors face a 20% tax rate on debt receipts and a 15% rate on equity. Determine the value of Aggie.
A) $120,000
B) $162,948
C) $258,537
D) $263,080
E) $332,143

Answers

Answer 1

Answer:

D) $263,080

Explanation:

Calculation to Determine the value

First step is to calculate the Unlevered firm amount

Unlevered firm = [$50,000 (.65)]/ .14

Unlevered firm= $232,142.86

Second Step is to calculate leverage tax shield value using this formula

Leverage tax shield value = [1 - ((1 - .35)(1 - .15)/1 - .20))]*$100,000

Leverage tax shield value = $30,937.50

Last step is to calculate the value

Using this formula

Total value=Unlevered firm+Leverage tax shield value

Let plug in the formula

Total Value = $232,142.86 + $30,937.50

Total Value = $263,080

Therefore the value will be $263,080


Related Questions

A deposit of $1000 is made in a bank account that pays 24% interest per year compounded quarterly. Approximately how much money will be in the account after 10 years

Answers

Answer:

$10,285.72

Explanation:

In this scenario, we can use the compound interest formula to calculate the total after 10 years. The formula is the  A = P * [tex](1 + r/n)^{nt}[/tex]

where,

A = final value after interest

P = initial investment amount

r = annual interest rate in decimal form

n = number of time the interest is compounded based on t

t = total amount of time

In this case, the interest is compounded quarterly meaning 4 times a year, therefore we can plug all the values into the formula and solve for A

A = P * [tex](1 + r/n)^{nt}[/tex]

A = 1000 * [tex](1 + 0.24/4)^{4*10}[/tex]

A = 1000 * [tex](1.06)^{40}[/tex]

A = 1000 * 10.2857

A = 10,285.72

Therefore after 10 years the account will have a total of $10,285.72

Professional Properties is considering remodeling the office building it leases to Heartland Insurance. The remodeling costs are estimated at $3.4 million. If the building is remodeled, Heartland Insurance has agreed to pay an additional $820,000 a year in rent for the next 5 years. The discount rate is 15 percent. What is the benefit of the remodeling project to Professional Properties? A) -$651,233 B) -$489,072 C) $5,214 D) $128,399 E) $311,417

Answers

Answer:

A) -$651,233

Explanation:

The computation of the benefit generated of the remodelling project is shown below:

If we considered the discounted rate i.e. 15% for 5 years of $820,000 so its present value would be $2,748,767 ($820,000 × 3.3521)

And, the predicted cost is $3,400,000

So here the cost is there instead of the benefit of

= $2,748,767 - $3,400,000

= -$651,233

Hence, the correct option is A

International trade specialists that buy goods at a discount from a small businesses and resell them abroad are called

A. commission house brokers

B. exporting trade companies

C. business trade unions

D. domestic channel companies

Answers

Answer: B. exporting trade companies

Explanation:

Trade unions are the organisations that are out in place so as to protect the interest of workers. They negotiate for better wages and salaries, provide job security, and seek better working conditions for their workers.

Export trading company is simply referred to as an independent company that helps in the provision of support services to the companies that are involved in the exportation of goods and services.

Commission house brokers is simply an individual who helps in representing people who have properties.

Therefore, the answer is exporting trade companies.

According to the basic quantity equation of money, if price and output fall while velocity increases, then:

Answers

Answer:

The quantity of money will fall

Explanation:

basic quantity equation of money's theory stressed that the general price of goods/services is attributed to the flow of money in circulation, I.e they have a linear relationship.The equation below gives the relationship between the quantity of money as well as price level. MV = PT

Where M = quantity of money

V =velocity of circulation

P = price level

According to the basic quantity equation of money, It should be noted that if price and output fall while velocity increases, then The quantity of money will fall.

When dealing with tangible products, consistency is usually measured in terms of:_____.
A. Features.
B. Attributes.
C. Systems.
D. Defects.

Answers

Answer:

D. Defects

Explanation:

In order to meet the unending needs and wants of consumers, to satisfactorily provide products that meets their requirements, tastes or preferences various manufacturing companies use five (5) main methods of production, and these are; labour-intensive production, mass production, batch production, capital-intensive production and job production.

Generally in Economics, the question of how goods are produced, determines how resources are combined in the production of goods.

This ultimately implies that, before a manufacturer produce its goods it determines the amount of resources that are available. These resources that are to be combined for the purpose of production of goods are entrepreneur, land, labor, and capital, which are generally referred to as the four (4) factors of production.

A tangible product refers to any product that can be physically touched by the end users or consumers such as electronic gadgets, bread, furniture, cooking utensils, etc.

When dealing with tangible products, consistency is usually measured in terms of defects. Any goods (products) manufactured by a company that is consistently devoid of defects such as broken parts or missing parts is generally considered to be of high quality and as such consumers would feel safe to use or buy such tangible products at all times.

Jerry works as an accountant in a manufacturing firm. His firm has sold goods to customers on credit, while the full payment for the goods is expected after a month. In which category should Jerry mention the price of these goods? A. accounts payable B. accounts receivable C. cost of goods sold D. depreciation E. operating expenses

Answers

Answer:

If we are talking about the price Jerry and his firm purchased goods for I would say "Cost of goods sold", if we are talking about the revenue that will be collected from customers in the future I would say "accounts recceivable"

Explanation:

Answer:

the answer is b. accounts receivable

Explanation:

a word-for-word copy from edmentum:

"Accounts receivable: Let’s say that a business sells goods to a customer on credit. The customer plans to make the payment a few months later. A business recognizes this amount as a current asset called accounts receivable until it receives the payment."

Mario a publicly held corporation with a 21 percent tax rate, has agreed to pay an annual salary of 1.3 million to its employees Mrs. ryman in making your calculations ignore the employer payroll tax

Answers

Answer:

ah

Explanation:

Zara collects massive amounts of data on its SKUs, orders, sales patterns, store inventories, and other variables. This information is stored in a(n)

Answers

Answer: D. data warehouse.

Explanation:

A Data warehouse is to data what money is to banks. Here, the data that a company has gathered from its many sources will be stored for easier access.

This data can then be analysed and reported sometimes with relation to one another in such a way that detailed reports are created and better decisions made.

Zara is most likely using a data warehouse to store the massive amounts of data collected from all the listed sources.

Select the benefits of mentoring goal process PLS HELP ASAP

Answers

Answer:

Mentoring relationships can result in the following:

Increased knowledge transfer.

Job satisfaction.

Smart succession planning.

Development of leadership skills.

Motivation for professional development and accountability.

Achievement of goals and objectives.

Stronger internal networks.

Increased teamwork.

Explanation:

WHAT IS IT?
1.it can be use as thickening agent or as a weak glue
3.a food spread made from dry roasted peanuts

Answers

Answer:

I believe its Peanut Butter.

June Corp. sells one product and uses a perpetual inventory system. The beginning inventory consisted of 100 units that cost $20 per unit. During the current month, the company purchased 580 units at $20 each. Sales during the month totaled 450 units for $43 each. What is the number of units in the ending inventory?

Answers

Answer:

Ending inventory in units= 230

Explanation:

Giving the following information:

Beginning inventory= 100 units

Purchases= 580 units

Sales during the month totaled 450 units

To calculate the ending inventory in units, we need to use the following formula:

Ending inventory in units= total units - units sold

Ending inventory in units= 680 - 450

Ending inventory in units= 230

You borrow $10,000 today at a nominal rate of 5%; inflation for the past 10 years has been exactly 2%. Today, inflation instantly rises to 7% and stays that way for the duration of your loan. Based on the above information, ceteris paribus (all else equal), today: Group of answer choices

Answers

Here is the answer choice to the question

a. the real rate of interest on your loan is 14%.

b. the real rate of interest on your loan was previously 10% and is now 35%.

c. the real rate of interest on your loan is now –2%.

d. you will pay the lender back exactly $9,500.

e. you will pay the lender back exactly $10,700

Answer:

C. the real interest rate on your loan is now -2%

Explanation:

The real interest rate of can be gotten by subtracting the nominal interest rate from the inflation rate from nominal interest rate

Inflation rate = 7%

Nominal interest rate= 5%

= 5 percent - 7 percent

= -2%

The real interest rate can be defined as the rate of interest an investor, saver or lender is going to receive after they have allowed for inflation.

A manager wishes to build a 3-sigma range chart for a process. The sample size is five, the mean of sample means is 16.01, and the average range is 5.3. What are the UCL and LCL, respectively, for this range chart?

a. 33.9 and 11.2
b. 6.3 and 0
c. 11.2 and 0
d. 33.9 and 0

Answers

Answer:

c. 11.2 and 0

Explanation:

The computation of the upper control limit and the lower control limit is shown below:

Average Range = R  = 5.3

Now

The Upper control Limit is

= D4 × R

= 2.115 × 5.3

= 11.2095

And,  

The Lower control limit is

= D3 × R

= 0 × 5.3

= 0

Hence, the correct answer is Option C i.e. 11.2 and 0

Question Mode Multiple Choice Question Preferred stockholders: Multiple choice question. have the right to receive dividends only if there are enough dividends to pay the common stockholders too. must receive dividends every year. must receive more dividends per share than the common stockholders. have the right to receive dividends only in the years the board of directors declares dividends.

Answers

Answer:

d. have the right to receive dividends only in the years the board of directors declares dividends.

Explanation:

Preferred shareholders have the right to receive dividends in the priority to the common shareholders of the company unit. In other words, if there is sufficient funds with the company to declare dividends both to preferred and common shareholders, then in that case, preferred shareholders will be entitled the right to receive dividends first, and remaining amount will be distributed to common shareholders. Only that, they have this right only when the board of directors declares dividends.

Southeast Airline had retained earnings of $1.5 million, sales of $5 million and net income of $0.5 million this year. It also paid dividends of $0.2 million this year. If the sales is projected to increase by 20% next year, what is the projected retained earnings for next year?

Answers

Answer:

$1.86 million

Explanation:

Given the above data, we can calculate the retained earning for next year to be;

Retained earning this year end = $1.5 million retained earning at the beginning + $0.5 million net income - $0.2 million dividends

= $1.8 million

Under the Real Estate Law of California, an agent is required to give a copy of the listing agreement to his principal at:__________.
a. the close of escrow.
b. the beginning of escrow.
c. once the buyer has signed it.
d. at the time of signing.

Answers

Answer:

d. at the time of signing.

Explanation:

Under Section 10142 of real estate law agent has to submit a copy of the listing agreement to the principal.

Section 10142 of the real estate law of California is attached with this is attached please find it.

A stock had returns of 18.58%, -5.58%, and 20.81% for the past three years. What is the variance of returns?

Answers

Answer:

Variance = 0.02141851

Explanation:

We first calculate the mean for the stocks

Mean = (0.1858 - 0.0558 + 0.2081) / 3

Mean = 0.3381 / 3

Mean = 0.1127

Variance = [(0.1858 - 0.1127)^2 + (- 0.0558 - 0.1127)^2 + (0.2081 - 0.1127)^2] / 3 -1

Variance = [0.0731^2 + (-0.1685^2) + 0.0954^2] / 2

Variance = 0.00534361 + 0.02839225 + 0.00910116 / 2

Variance = 0.04283702 / 2

Variance = 0.02141851

The variance of returns is 0.02141851

A trading arrangement that eliminates most or all barriers to trade among participating nations and utilizes common barriers to trade with other countries outside the group is called a

Answers

Answer:

preferential trade agreement

Explanation:

This agreement is known as a preferential trade agreement. It is called this because it tends to make it easier for specific goods to be traded but only to the countries that are part of the group and/or agreement. This agreement also makes it harder for countries that are not part of the agreement to be able to trade with the countries that are in order to maintain the countries within the agreement trading with each other.

Irfan runs a small business. His business’s total liabilities amount to $200,000. His net profit for the latest accounting period is $50,000. The total value of all the business assets comes to $600,000. What is the debt to asset ratio in the case of Irfan’s business? The debt to assets ratio of Irfan’s business, to two decimal places, is percent.

Answers

Small businesses are either services or retail operations like grocery stores, medical stores, tradespeople, bakeries, and small manufacturing units.

What is the meaning of Small businesses?

Small companies typically offer services or are retail establishments like grocery stores, pharmacies, tradesmen, bakeries, and micro-manufacturing facilities. Small businesses are privately held companies that need less equipment, labor, and cash than larger companies.

The most straightforward type of business is a sole proprietorship. Small businesses are distinct legal entities such as corporations, partnerships, and sole proprietorships that have fewer employees and/or lower yearly income than a regular-sized company. Businesses are considered "small" if they are eligible for government assistance and favorable tax treatment.

Learn more about the Small Business here:

https://brainly.com/question/13424073

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The manager of Lawn and Garden Services would like to estimate the proportion of her employees' time spent performing various gardening and lawn care activities. She has made 400 random observations of a typical worker, with the following results:
Activity Time Observed
Mowing 200
Trimming 80
Raking 40
Miscellaneous 80
What is the probability that the true proportion of time spent mowing is exactly equal to the sample proportion?
a) 1
b) 0
c) .5
d) .2
e) 1

Answers

Answer:

b) 0

Explanation:

In this case, the manager observed that a worker spent 50% of his/her time mowing the garden, but in case this is correct, it would only apply to this worker. She would need to collect data and analyze it from a much larger sample which includes other workers in order to determine if this proportion applies to whole group. You cannot infer a conclusion based on a limited amount of data collected from just one subject. The methodology is incorrect.

One of the draw backs of the profitablity index as a criteria for judging whether to accept a capital investment project is that:_______

Answers

Answer:

It might lead to over-optimistic projections

Explanation:

In simple words, the problem with using profitability index as the index criteria lies with the procedure of estimating it. In order to consider the business situation, the organisational finance group requires to settle with the corporation supervisors.

Leadership may be too enthusiastic about their assignment, so forecasts for cash flow may be too substantial. Consequently, in predicting the profitability index, there may be an uptrend prejudice.

Sheridan Company receives a $14000, 3-month, 8% promissory note from Carla Vista Company in settlement of an open accounts receivable. What entry will Sheridan Company make upon receiving the note?

Answers

Answer and Explanation:

The journal entry to record while receiving the note is shown below:

Notes receivable  Dr. $14,000

          To Accounts receivable $14,000

(Being receiving of the note is recorded)

Here the note receivable is debited as it increased the assets and credited the account receivable as it decreased the assets

The same is to be considered

According to the video, what is the main purpose of Insurance Underwriters’ work?
to protect insurance companies
to investigate insurance claims
to sell insurance policies
to advise individual investors

Answers

Answer:

A

Explanation:

just did it lol

Answer:

A. to protect insurance companies

Explanation: Just got done on edge

If a company has $10,000 in Cash, $2,000 in Accounts Receivable, $100,000 in Building and Land, $30,000 in Accounts Payable, and $20,000 in Notes Payable, how much is the business worth or what is its equity?

Answers

Answer:

the business is worth 162000

Explanation:

I added all of the stuff up to create a number have a nice day please

If a company has $10,000 in Cash, $2,000 in Accounts Receivable. The business worth and its equity is equal to $62,000.

What is the term Equity about?

Stockholders' equity, also referred to as shareholders' equity, it is the remaining amount of assets available to shareholders after all liabilities have been paid.

Given Information:

Cash=$10,000Accounts receivable=$2,000Building and land=$100,000Accounts payable=$30,000Notes payable=$20,000

Solution:

Equity=Total assets- Total liabilities

Equity=$10,000+$2,000+$100,000-$30,000-$20,000

Equity=$62,000

Hence, the equity of a company is equal to $62,000.

Learn more about equity, refer to the link:

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1. Why do you think that there’s a huge gap in theory (what we know we should do) and practice (what we’re actually doing) of leadership development?

2. What are some reasons that companies might not be addressing Gen Y leadership development programs?

Answers

Answer:

1. Theories are based on assumptions.  It is practice that verifies the underlying assumptions behind every theory, using real-life experiences.   If theories are not put to use, they remain theories with untested assumptions.

2. The current leadership does not understand the millennials.  The millennials are operating with tools that look too sophisticated for the current leadership.  There is much confusion between what the Gen Y millennials want to achieve and the expected achievement targets being set by the current leadership. Leadership development programs for the Gen Y can only be implemented when misunderstanding is removed.

Explanation:

Leadership development includes all the processes that expand the capacities of individuals to perform in leadership positions by facilitating the execution of a company's strategy, building alignments, and winning mindsets while growing the capabilities of others to succeed the current leaders.

There is a more gap between the theory and the practice because the theories are totally based on the assumptions whereas the practice is fully depending on the theory.

Why there is a gap between theory and practice?

(1).

There is a huge gap in theory and practice in the leadership style  because the theories are established or fully founded on assumptions.  

But in the practice, it confirms the implicit premises or assumptions behind every theory by using real experiences of life.

Its theories are not taken place, then the practice is also not works.

(2).

The cutting-edge management does now no longer recognize the time period.  

The time period is run away with power train, that visual aspect too state-of-the-art for the cutting-edge management.

Leadership improvement packages for the Gen Y can handiest be carried out whilst false impression is removed.

There is a lot of confusion among what the Gen Y millennials need to accomplish, and the expected fulfillment targets being set through the cutting-edge management.

Therefore, there are the difference between the theory and practice.

Learn more about leadership, refer to:

https://brainly.com/question/7177953

Determine the order in which the following budgets are generally prepared.
A. Material purchases budget select a number.
B. Sales budget select a number.
C. Budgeted income statement select a number.
D. Production budget select a number.

Answers

Answer:

The order in which the following budgets are generally prepared are as arranged below:

1. Sales budget

2. Production budget

3. Material purchases budget

4. Budgeted income statement

In an attempt to expatiate the decision above. We must observe that income statement starts with revenue. Similarly here, the budget will starts with sales. The revenue section is followed by production budget which from which various budgets like material, direct labor and overhead budget are prepared from. After the Production budget, follow the Material purchase budget, then Budgeted Income Statement

Who owns the factors of production in a planned economy?
A.
Individuals
B.
Nobody
C.
The church
D.
The government

Answers

Answer:

A. Individuals

Answer:

D.

Explanation:

Under a command economy, governments own the factors of production. This is also sometimes referred to as a planned economy. (I like to call it a command economy, but it's the same thing.)

The following information is available for Silver Company for the three months ended March 31, 2019:

Merchandise inventory, January 1,
2013 $900,000
Purchases 34,00,000
Freight-in 2,00,000
Sales 48,00,000

The gross margin recorded was 25% of sales. What should be the merchandise inventory at March 31, 2019?

a. $700,000
b. $1,125,000
c. $900,000
d. $1,200,000

Answers

Answer:

c. $900,000

Explanation:

The ending inventory is calculated as;

Beginning inventory

$900,000

Add: Purchases

$3,400,000

Add: Freight in

$200,000

Total purchase Balance

$3,600,000

Cost of goods available

$4,500,000

Less: Cost of (goods estimated)

($3,600,000)

Ending inventory

$900,000

Therefore, the merchandise inventory at March 31, 2019 is $900,000

Headers and footers are handling instructions. True False

Answers

Answer:

False

Explanation:

Answer:

its true

Explanation:

edg got it correct

What is the present calue of 1000 received 10 years in the future if interst rates are 10% compounded quarterly?

Answers

Answer:

The present value is $57.31.

Explanation:

Future value, FV = $ 1000, n = 10 years, rate = 10% and m = 3.

FV = PV[tex](1 + r)^{mn}[/tex]

where FV is the future value, PV is the present value, r is the rate, m is the number of periods, n is the number of ears.

⇒ 1000 = PV[tex](1 + 0.1)^{10*3}[/tex]

             = PV[tex](1.1)^{30}[/tex]

1000 = PV x 17.4494

PV = [tex]\frac{1000}{17.4494}[/tex]

     = 57.31

The present value is $57.31.

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