Answer: Global citizens
Explanation:
Global citizens are the people who use the global success of a company as an indication of the product quality and innovativeness. Goobal citizens are concerned that firm acts in a socially responsible manner.
Global citizens role in tackling issues like water shortages, climate change, terrorism, have an impact on the future of the world. A global citize understands the wider world.
Answer:
The unlevered value of the firm is $869325.15
Explanation:
For computing the value of unlevered firm, the following formula should be used which is shown below:
Value of levered firm = Earning before interest and taxes × (1 - tax rate) ÷ cost of equity
where,
Earnings before income and taxes are $218,000
Cost of equity is 16.3%
And, the tax rate is 35%
Now put these values on the above formula
So, the value would be equals to
= $218,000 × (1 - 0.35) ÷ 16.3%
= $141,700 ÷ 16.3%
= $869325.15
The other terms like bonds and the annual coupon should not be considered in the computation part because we have to calculate for unlevered firm which only includes equity and the bond is a debt security. Thus, it is irrelevant.
Hence, the unlevered value of the firm is $869325.15
Answer:
a. Number of bonds outstanding
Explanation:
In the case when the firm wants to issue the new bonds but keeping the equity portion constant so the debt weight should increased from 70% to the higher weightage
So as per the given situation, the option a is correct as it also increased the number of outsanding bonds
Therefore the same is to be considered
Hence, the other options seems wrong
Answer:
$846,000
Explanation:
Paid in capital = Par value of shares + Share premium paid or Additional paid in capital
So,
Par value of total issued shares = (54000 + 36000) * 7 = $630,000
Premium can be calculated as
for 54000 shares = 9 - 7 = $2/share
or 36000 shares = 10 - 7 = $3/share
this gives us a total additional paid in capital of
= (54000 * 2) + (36000 * 3) = $216,000
Paid in capital = 216000 + 630000 = $846,000
Note that capital dividends are deducted from the premium account where as cash dividends are deducted from retained earnings leaving no impact on paid in capital. We are assuming cash dividends.
