Answer:
the after tax cost of debt is 3.90 %.
Explanation:
The Cost of debt is the rate required on the bond and this is calculated as follows :
PV = - $2,201
n = 21 × 2 = 42
PMT = ($2,000 × 7.38 %) ÷ 2 = $73.80
P/YR = 2
FV = $2,000
r = ?
Using a Financial Calculator, the Pre-tax Cost of debt, r is 6.4963% or 6.50 % (2 decimal places)
After tax cost of debt = Interest rate × (1 - tax rate)
= 6.50 % × (1 - 0.40)
= 3.90 %
Answer:
Leverage buyout
Explanation:
Leverage buyout refers to the acquisition of another company using debt as the main source of financing the deal. The acquiring company borrows from various sources and will often use the assets of the acquired company as collateral. In leverage buyout, the acquiring entity borrows up to 80 percent or more and finances the balance with its equity.
The use of debt enhances the rate of return of the acquiring firm. Greystone Group is using 5 million of its funds and borrowing 20 million. The debts represent 80 percent of the cost of acquisition. The acquiring entity can achieve a higher rate of return by using as little of its funds as possible.
Answer:
The answer is below
Explanation:
EVM uses Cost, Scope and time to characterize the achievement of a task. The expense of undertaking is the measure of cash spent to convey the task. The cutoff time for conveyance is the hour of the venture and degree is the characteristics, highlights and advantages of the task as wanted by the client.
The specialty of adjusting these three limitations characterizes the execution achievement and nature of the venture. Any one factor has sway on the other. For instance on the off chance that the expense of the venture is diminished or expanded, at that point either a portion of the highlights of the undertaking will be diminished or expanded accordingly bringing about decline or increment of advantages to the client. The decline in cost in this manner influences scope which thus impacts the hour of the undertaking. With each element or advantage expanded or diminished, the time will likewise increment or decline. Not just that even the enlisting of individual will influence these three requirements. Increment in cost may permit decline in the extension and decrease of groups at work, in this way increment in time.
EVM investigates just three parts of time, cost and scope and doesn't trouble much about the chances, dangers and bottlenecks, quality or significance of different task groups. Cruel the truth is that venture administrators consider just expense and time as the fundamental requirements and extension has shocked sheet. This is basically because of the way that undertaking administrators can best gauge two imperatives one after another. The triple imperatives will make the best parity gave that effect of any adjustment in these three limitations is surely known and conveyed to the partners with the goal that quality which should be prime target can be acquired.
The merits and demerits of EVM are attached
Answer:
The correct answer is $ 4.5714 which is not in the answer choice but is close to $432.00 million
Explanation:
Solution
Given that:
let us Assume that Omicron uses the entire $60 million to repurchase shares. The amount of the regular yearly dividends in the future is closest to is:
The Enterprise value =$48/0.10 = $480 million
Then,
The Market value = Enterprise value + cash = $480 + $60 = $540 million
Thus,
The Share price = market value / shares outstanding = $480 million / 12 million = $40
The Number of shares repurchased = $60 million / $40 = 1,500,000 shares
The Shares outstanding = 12,000,000 - 1,500,000 = 10,500,000
Dividend = $48 million free cash flow / 10,500,000 = $4.571
Shoemaker Corporation Journal Entries
1. April 01, 2021
Dr Notes receivable 600,000
Cr Cash600,000
2. December 31,2021
Dr Interest receivable 42,075
Cr Interest revenue 42,075
3. April 01, 2019
Dr Cash 566,100
Cr Notes receivable 510,000
Cr Interest receivable 42,075
CrInterest revenue 14,025
Workings:
2.Interest revenue: $510,000 × 11% × 9/12 = $42,075
3.Interest revenue: $510,000 × 11% × 3/12 = $14,025
42,075+ 14,025=56,100
510,000+ 56,100= 566,100