#1Â
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The firm has outstanding debt with a market value of 60 million. The firm's equity has a market value of 100 million. What is the firm worth?
#2
Let Timco use a capital structure that is 40% debt and 60% equity, The firm can borrow at 6%. The tax rate is 40%. Let the firm beta be 1.8, the market return 14%, and the risk free rate 2%. Find the WACC.
#3
Let Timco use a capital structure that is 40% debt and 60% equity, The firm can borrow at 6%. The tax rate is 40%. Timco is planning on paying dividend of 3 to maintain our 5% growth. The current stock price is 16.13. Find the WACC.
#4
Let Timco use a capital structure that is 30% debt and 70% equity, The firm can borrow at 6%. The tax rate is 40%. Timco is planning on paying dividend of 2 to maintain our 5% growth. The current stock price is 16.13. Find the WACC.
#5
We are thinking of buying a new delivery van. It will cost 40000. We will use three years MACRS for depreciation. We think that at the end of the third year we can sell it for 12000. The tax rate is 30%. What would be the effect of selling the van on the third year cash flow?
#6
Timco is considering the purchase of a new machine. The machine costs 34,000. It will cost 5500 to modify and install it. We will need to spend 4000 on new parts and lubricants to keep it running smoothly. The machine is 3 year MACRS class. Find the year two depreciation.
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Status NEW
Posted 24 Feb 2019 02:02 PM
My Price 5.00
FIN----------- 70-----------1 Q-----------uiz----------- Qu-----------est-----------ion-----------s-----------
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file 1551109722-FIN 701 Quiz Questions.docx preview (582 words )
#-----------1Â ----------- T-----------he -----------fir-----------m h-----------as -----------out-----------sta-----------ndi-----------ng -----------deb-----------t w-----------ith----------- a -----------mar-----------ket----------- va-----------lue----------- of----------- 60----------- mi-----------lli-----------on.----------- Th-----------e f-----------irm-----------'s -----------equ-----------ity----------- ha-----------s a----------- ma-----------rke-----------t v-----------alu-----------e o-----------f 1-----------00 -----------mil-----------lio-----------n. -----------Wha-----------t i-----------s t-----------he -----------fir-----------m w-----------ort-----------h? ----------- #2----------- L-----------et -----------Tim-----------co -----------use----------- a -----------cap-----------ita-----------l s-----------tru-----------ctu-----------re -----------tha-----------t i-----------s 4-----------0% -----------deb-----------t a-----------nd -----------60%----------- eq-----------uit-----------y, -----------The----------- fi-----------rm -----------can----------- bo-----------rro-----------w a-----------t 6-----------%. -----------The----------- ta-----------x r-----------ate----------- is----------- 40-----------%. -----------Let----------- th-----------e f-----------irm----------- be-----------ta -----------be -----------1.8-----------, t-----------he -----------mar-----------ket----------- re-----------tur-----------n 1-----------4%,----------- an-----------d t-----------he -----------ris-----------k f-----------ree----------- ra-----------te -----------2%.----------- Fi-----------nd -----------the----------- WA-----------CC.----------- #-----------3 -----------Let----------- Ti-----------mco----------- us-----------e a----------- ca-----------pit-----------al -----------str-----------uct-----------ure----------- th-----------at -----------is -----------40%----------- de-----------bt -----------and----------- 60-----------% e-----------qui-----------ty,-----------
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