Assignment for Corporate Finance Assignment Major : Group : Name : 1 i) How much business risk does Hill Country face? Hill Country Snack Foods Company manufactures‚ markets‚ and distributes snack foods and frozen treats throughout the United States. Hill Country is overall well performed company. Sales‚ Net Income‚ ROE and ROA had increased at a steady rate. Company mainly focused on maximizing the shareholder value by the
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Quiz 2 Corporate Finance NAME ______________________ Apring 2013 2012 70 pts Show all work MC=5pts each 1. Find the EPS (y-axis) // EBIT (x-axis) crossover point of the following two capital structure plans. Complete the table and Draw the graph and show all the points including crossover‚ where line crosses y-axis‚ and the three EBITs below 30pts Assets = $3‚000‚000 Stock Price = $20 Interest Expense = 12% PLAN I D/E = 1.1 Recession Expected
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CAPITAL STRUCTURE DECISIONS: THE BASICS Problems 1: The Star Wood company is currently in the following situation: (1) EBIT = $ 4.7 Million; (2) Tax Rate‚ T = 40%; (3) Value of Debt‚ D = $2 Million; (4) rd (Cost of Debt) = 10%; (5) rs (Cost of Equity) = 15%; (6) Shares of stock outstanding = 600‚000 & Stock price‚ Po = $30. The firm’s market value is stable‚ and it expects no growth‚ so all earnings are paid out as dividends. The debt consists of perpetual bonds. a. What is the total
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Get the beta of equity from the two comparable companies Orange and Tomy by estimating regression of returns on the market return. Unlever these equity beta using the actual capital structure of these companies to get their asset beta Take the equally- or value-weighted average of asset beta across the two comparable companies The case state that the upgrade will increase risk by 50% Take asset beta estimated in the question above‚ and increase it by 50% Estimate the market historical return using
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The Venture Capital Division of Boeing has four projects on the table with three additional leverages of debt. As the financial analyst for the division I was given the task of evaluating the four capital budgeting projects. After evaluating each project I will recommend which project will bring the most value to shareholders and the firm. What is the cost of equity for each project at 0‚ 20%‚ and 50% leverage? From the information provided the cost of equity at 0‚ 20%‚ and 50% leverage was
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Cost of Capital at Ameritrade Christoph Schneider Ross School of Business Basic assumptions Tax Rate Beta Debt Leverage (D/V) Leverage (D/E) 1997 35.5% 0.25 0.00 0.00 1996 39.4% 1995 35.1% Average 36.7% Comparable companies’ βE Tax Rate Beta Debt Leverage (D/V) Leverage (D/E) Discount Brokerage Firms Charles Schwab Quick & Reilly Waterhouse Securities 1997 35.5% 1996 39.4% β E from Jan’92-Dec’96 2.30 2.20 β E from all months 2.35 2.30
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Supplementary Notes: Capital Structure by Kyung Hwan Shim University of New South Wales Australian School of Business School of Banking & Finance for FINS 1613 S1 2011 May 14‚ 2011 ∗ These notes are preliminary and under development. They are made available for FINS 1613 S1 2011 students only and may not be distributed or used without the author’s written consent. ∗ 1 Contents 1 Introduction 2 Financial Leverage 3 M&M Proposition I: Capital Structure Irrelevance 4 M&M Proposition II:
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Introduction Parametric Equations and Curves Tangents with Parametric Equations Area with Parametric Equations Arc Length with Parametric Equations Surface Area with Parametric Equations Polar Coordinates Tangents with Polar Coordinates Area with Polar Coordinates Arc Length with Polar Coordinates Surface Area with Polar Coordinates Arc Length and Surface Area Revisited Introduction Sequences More on Sequences Series - The Basics
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2. Case: Pioneer Petroleum Note that p.2 of the case incorrectly states that the firm’s debt policy is that debt should comprise 50% of its total capital structure‚ defined as “long-term debt plus book equity.” The correct text should state “long-term debt plus market equity.” Answer the following questions: a. Does Pioneer estimate its overall corporate weighted-average cost of capital correctly? I think they´re WACC is correctly estimated. They use 50% debt and 50% equity‚ which I think is very
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What is meant by the term media convergence with regard to technology‚ and how has it affected everyday life? I believe media convergence with regard to technology is when some forms of media combine together. A perfect example is the internet and telephones we have our now smart phones‚ or the classic newspaper and television gives us the news‚ now even combining television and radio whether you listen to the news on the radio or listen to music both are now on the television. These forms of technology
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