Pettit printing company has a total market value of $100 million, consisting of 1 million shares selling for $50 per share and $50 million of 10 percent perpetual bonds now selling at par. the company's ebit is $13.24 million, and its tax rate is 15 percent. pettit can change its capital structure by either increasing its debt to 70 percent (base on market value) or decrease it to 30 percent. if its decides to increase its use of leverage, it must call its old bonds and issue new ones with a 12 percent coupon. if it decides to decrease its leverage, it will call in its old bonds and replace them with new 8 percent coupon bonds. the company wills ell or repurchase stock at the new equilibrium price to complete the capital structure change. the firm pays out all earnings as dividends; hence; its stock is a zero growth stock. its current cost of equity, rs; is 14 percent. if it increases leverage rs will be 16 percent. if it decreases leverage, rs will be 13 percent. what is the firm's wacc and total corporate value under each capital structure?

Answers

Answer 1

The weighted average cost of capital for the firm will be 11.25%.

How to calculate the WACC?

The weighted average cost of capital is the calculation of the cost of capital for a firm where each category of capital is weighted.

Here, the weighted average cost of capital will be:

= 0.5(10%)(1 - 15%) + 0.5(14%)

= 0.5(0.1)(0.85) + 0.5(0.14)

= 11.25%

The corporate value at 70% debt when WACC is 11.94% will be:

= (EBIT)(1 - T)/WACC

= (13.24)(1 - 0.15)/0.1194

= $94.26 million

The corporate value at 30% debt when WACC is 11.14% will be:

= (EBIT)(1 - T)/WACC

= (13.24)(1 - 0.15)/0.1114

= $101.02 million

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Related Questions

A rectangle is divided into 4 equal rows with 4 squares in each row. mark says 1 square is 1/4 of the whole rectangle. kareem says 1 row of the whole rectangle.

Answers

Answer:
Kareem is correct
4 rows = each row is 1/4 of the rectangle

Mark the statements that are true. A. An angle that measures π/4 radians also measures 45°. B. An angle that measures 180° also measures π radians. C. An angle that measures 60° also measures π/3 radians. D. An angle that measures π/3 radians also measures 30°.​

Answers

Answer:

  TRUE: A, B, C

  False: D

Step-by-step explanation:

A full circle of 360° has a radian measure of 2π radians. The relationship is proportional, so π radians is 180°.

__

A. An angle that measures π/4 radians also measures 45°. TRUE

  45° × π/180° radians = π/4 radians

B. An angle that measures 180° also measures π radians. TRUE

  180° × π/180° radians = π radians

C. An angle that measures 60° also measures π/3 radians. TRUE

  60° × π/180° radians = π/3 radians

D. An angle that measures π/3 radians also measures 30°.​ FALSE

  30° × π/180° radians = π/6 radians

A mother and daughter decided to add their ages together. The sum of their ages is 76. Six years ago, the mother was 3 times the age of her daughter. How old is the daughter now?​

Answers

Answer: The answer will be 19

Answer: 23 years old

Step-by-step explanation:

A square notepad has sides that are 10 centimeters long. What is the notepad's area?

Answers

Answer:

100cm²

Step-by-step explanation:

The notepad is square.

The area of a square = length X width.

All the sides of a square are the same length.

Therefore, the area of the notepad = 10 X 10 which equals 100.

Don't forget the units!

The units for area is cm².

The units for volume is cm³.

This is area so your answer is 100cm².

Hope this helped, have a nice day!

the length of a line is y centimetres write down an expressions in terms of y for the length of the line in millimetres

Answers

Answer:

L=10y

Step-by-step explanation:

1cm=10mm

Hence, the length in millimeters will be 10 times the value in cm.

2x(x-5) -x (3 + 2x) = 26
help me pls

Answers

Answer:

x = -2

Step-by-step explanation:

[tex]2x(x-5)-x(3+2x) = 26\\2x^{2} -10x-3x-2x^{2} = 26\\-13x=26\\x=\frac{26}{-13} \\=-2[/tex]

Its basically the order of operations, from left to right , evaluate brackets (if possible), then multiplication or division, lastly followed by addition or subtraction.

2x2-10x-3x-2x2=26

Eliminam opusele

reducem termenii

-13x=26

imparte ambele parti

x=-2

Step-by-step explanation:

On the first day of a song release, it had 20 million streams. If the number of streams increases by 10% per day, how many streams will there be on the seventh day

Answers

Answer:

  35.4 million

Step-by-step explanation:

We assume the description "increases by 10% per day" means the base of the percentage is the previous day's number of streams. Then the sequence of streams on consecutive days is a geometric sequence with a first term of 20 million and a common ratio of (1 +10%) = 1.10.

__

streams on day n

The n-th term of a geometric sequence is ...

  an = a1×r^(n-1) . . . . . where a1 is the first term, and r is the common ratio

The sequence of streams on consecutive days is then ...

  an = 20×1.10^(n-1) . . . . millions of streams on day n

seventh day

For n = 7, the number of streams is ...

  a7 = 20×1.10^(7 -1) ≈ 35.4 . . . . million streams

There will be about 35.4 million streams on the seventh day.

11/12 - 7/9
5/36
5/72
25/36
25/72

Answers

  c

Step-by-step explanation:

Write in the form ( x + p ) ^2 + q x^ 2 − 10 x

Answers

Answer:

(x - 5)² - 25

Step-by-step explanation:

using the method of completing the square

x² - 10x

add/subtract ( half the coefficient of the x- term )² to x² - 10x

x² + 2(- 5)x + 25 - 25

= (x - 5)² - 25

Evaluate (cant write it out, picture included)

Answers

Let's solve this problem step-by-step:

  ⇒ with our knowledge of PEMDAS

     ⇒ (look at the image attached)

Let's solve:

Let's first plug n's value

              [tex]\frac{9}n}+4 = > \frac{9}{-3}+4[/tex]

Let's first do the division

              [tex]\frac{9}{-3}+4=-3+4[/tex]

Now let's add

             [tex]-3+4=1[/tex]

Answer: 1

Hope that helps!

A graph shows the number of texts, numbered 10 to 100, on the x-axis, and the total cost in dollars, numbered 3 to 27, on the y-axis. A straight red line with a positive slope, labeled Emilia, begins at (0, 10), and a straight blue line with a positive slope, labeled Hiroto, begins at (0, 20). Both lines intersect at point (50, 22.5).
Hiroto’s texting plan costs $20 per month, plus $0.05 per text message that is sent or received. Emilia’s plan costs $10 per month and $0.25 per text. Using the graph below, which statement is true?

Answers

(50, 22.5) is the solution of the system of equations, therefore, the true statement would be: Both plans cost the same when 50 texts are sent.

What is the Solution of a System of Linear Equations?

A solution to the system of linear equations is the point of intersection where both line of each equation meet.

The solution to the system of linear equations given in the graph attached below is (50, 22.5).

(50, 22.5) implies that both plans will cost the total amount when 50 text are sent.

The true statement using the graph would be: Both plans cost the same when 50 texts are sent.

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Answer:

Both plans cost the same when 22 texts are sent

Step-by-step explanation:

on edge

What is the product of the fractions below?
1/8 * 4/5

Answers

Answer: 1/10

Step-by-step explanation:

(1 x 4)/(8x5)

4/40

1/10

please answer, much appreciated!!!!!

Answers

Answer:

i don't understand your question

Step-by-step explanation:

Question 5 of 5
Select the correct answer from each drop-down menu.
The area of this rectangle is 54 square inches. Create an equation to find the value of n.
3(n-1)
54 square inches n+2
rẻ tint
▼ = 0

Answers

Answer:

[tex]3n^2+3n-6=54[/tex]

Step-by-step explanation:

Total Area=54 square inches. Area=length*width.

Because the length is [tex][3(n-1)][/tex], and the width is [tex](n+2)[/tex], you can plug that into the equation for area. In this case, because the total area is 54, we can plug that in for area.

[tex][3(n-1)](n+2)=54[/tex]

Distribute through the parenthesis in [tex]3(n-1)[/tex].

[tex](3n-3)(n+2)=54[/tex]

Then, multiply [tex]3n-3[/tex] and [tex]n+2[/tex] using whatever method you prefer. I used FOIL, which stands for First, Outer, Inner, Last. You multiply the first terms together, the outer terms together, the inner terms together, and the last terms together.  

[tex]3n^2+6n-3n-6=54[/tex]

Simplify.

[tex]3n^2+3n-6=54[/tex]

Find Median of 10,12,14 and 16

Answers

Step-by-step explanation:

the median is the value, where half of the other values is smaller (or equal), and the other half bigger (or equal).

with an even number of data points that is not directly possible to find.

in this case the 2 middle values are taken and their mean value is the median.

in our case, the 2 middle values are 12 and 14.

their mean value is

(12+14)/2 = 26/2 = 13

so,

13 is the median (even though if is not a data point itself).

Ok, so I have a math assignment that is due on Monday (so in 2 days), but I don't understand it. Here are the instructions:

You buy a pair of jeans at a department store.
Jeans_____ $39.99
Discount___ -10.00
Subtotal____ 29.99
Sales Tax___ 31.94

I have the first two questions done for this question, and I just need help on the last one. Here it is:

The price of the jeans includes a 60% markup. After the discount, what is the percent of markup to the nearest percent?

The percent of markup is __%.

Can anyone please help me?

Thanks!

Answers

I am guessing it’s 47%

In one country, approximately 178,200 of 990,000 residences are rentals. Determine the percentage of residences in the country that are rentals.

Answers

Answer:

18%

Step-by-step explanation:

178 200 / 990 000    x 100% = 18%

A farmer creates a rectangular pen using part of the wall of a barn for one side of the pen and a total of 130 feet of fencing for the remaining 3 sides, as shown in the diagram. Write and equation which gives the area of the pen, A, as a function of x, the length of fence parallel to the barn

Answers

The equation that describes the which gives the area of the pen, A, as a function of x, the length of fence parallel to the barn is A = 130x - x²

How to find area of a rectangle?

The pen is rectangular. Therefore,

area of a rectangle = lw

where

l = lengthw = width

Therefore,

perimeter = 2w + l

perimeter = 2w + x

130 = 2w + x

130 - x = 2w

w = 65 - 1/ 2 x

A = xw

A = x(65 - 1/ 2 x)

A = 65x - 1 / 2 x²

Therefore, the function that represents A, the area of the pen is as follows:

A = 130x - x²

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ACTIVITY #1
Try It!
A. Write the definition, property, postulate or theorem that will prove each of the given statements.

Answers

What completes the proof are:

1. LC ≅ CU; CU ≅ UK

2. Given

3. Unequal angle theorem (Aa → Ss)

What is the Unequal Angle Theorem?

The unequal angle theorem states that the longer side of a triangle will always be directly opposite the largest angle measure. This implies that, if an angle that is opposite a side is greater than another another, the side it is opposite will also be longer than the side opposite the other angle (Aa → Ss).

From the image given, statement 1 was given as well as statement 2.

Statement 1 would be: LC ≅ CU; CU ≅ UK.

The reason for statement 2 will also be "given".

Then, UL > CK using the unequal angle theorem (Aa → Ss).

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Which answer choice has the set of numbers
ordered correctly from least to greatest?
16
13, √, 1.71, 9
3
√. 12, 16, 1.71
4

3
16
1.71, 12, 1
9
O
16.1.71,√, 12
3
9

Answers

Answer:

0

3

3

3

8

9

12,161.71√

I think his is the best order

Your teacher just bought a new aquarium that is a rectangular prism. If his/her aquarium has a length 48 inches, a width of 36 inches and a height of 30 inches, what is the aquarium’s volume?

Answers

The volume of the rectangular aquarium prism will be 51840 cubic inches.

What is a rectangular prism?

A closed solid with two parallel rectangular bases joined by a rectangle surface is known as a rectangular prism.

Your teacher just bought a new aquarium that is a rectangular prism.

If an aquarium has a length of 48 inches, a width of 36 inches, and a height of 30 inches.

Then the volume of the aquarium will be

The volume is given as

Volume = Length x Width x Height

Then we have

Volume = 48 x 36 x 30

Volume = 51840 cubic inches

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Describe the effect the change in scale has on what the graph suggests. a. On graph B, the group of birds seems to have twice as much as the group of mammals. b. The differences between the groups seems much less in Graph A. c. The differences between the groups seems much less in Graph B. d. On graph A, the group of mammals seems to have one-quarter as much as the group of fish. Please select the best answer from the choices provided

Answers

The effect that the change in scale has on what the graph suggests is C. The differences between the groups seems much less in Graph B.

What is a graph?

It should be noted that graph simply means a diagram that's used to show the information about a data given.

Here, the effect that the change in scale has on what the graph suggests is that the differences between the groups seems much less in Graph B.

Therefore, the correct option is C.

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A sector of a circle has central angle 120 degrees and arc length 10π
centimeters. What is the radius of the circle

Answers

Answer:

the radius = 15 cm

Step-by-step explanation:

let r be the radius of the circle.

→ We know that in circle , the length of an arc

and the corresponding central angle are proportional.

180 corresponds to πr

120 corresponds to 10π

Then

[tex]\frac{\uppi r}{180} =\frac{10\uppi }{120}[/tex]

[tex]\Longrightarrow r=\frac{180\times 10\pi }{120\pi } =\frac{180}{12} =15[/tex]

In the following exercises, translate into an equation and solve
Kindergarten Connie’s kindergarten class has 24 children. She wants them to get into 4 equal groups. How many children will she put in each group?

Answers

Answer: 6 children

Step-by-step explanation:

Given:

Children - 24

Groups - 4

Number of children per group - x

Solve:

24 ÷ 4 = x

x = 6

Hope it helps!!! Please mark as brainliest. Thanks :D

Use the function to predict the minimum target heart rate for a person 20 years old. beats per minute

Answers

The minimum target heart rate for a person 20 years old is 120 beats per minute

How to predict the minimum target heart rate?

The equation of the function is given as:

y = -0.6x + 132

Where x represents the age, and y represents the minimum target heart rate

From the question, we have:

x = 20

Substitute x = 20 in y = -0.6x + 132

This gives

y = -0.6 *20 + 132

Evaluate

y = 120

Hence, the minimum target heart rate for a person 20 years old is 120 beats per minute

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Answer:

Answer is 120 !!

Step-by-step explanation:

~Hope this helps! :)

A tub of water is emptied at a rate of 3 gallons per minute. The equation y –12 = –3(x – 1) models the amount of water remaining, where x is time (in minutes) and y is the amount of water left (in gallons). Analyze the work shown below to determine the initial amount of water.

1. Solve for the y-variable.

y – 12 = –3(x – 1)

y – 12 = –3x + 3

y = –3x +15

2. Write the equation using function notation.

f(x) = –3x +15

The tub started with
gallons of water.

Answers

The initial amount of the water is 15 gallons

Linear functions

These are functions that has a leading degree of 1. Given the equation that represents the amount of water remaining after x minutes;

y - 12 = -3(x- 1)

y -12 = -3x + 3

y = -3x +3 + 12

y = -3x + 15

In order to determine the initial amount of water, we will substitute x =0 into the function

y = -3(0) + 15

y = 15

Hence the initial amount of the water is 15 gallons

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Answer:

15

Step-by-step explanation:

Use technology or a z-score table to answer the question.
The weights of boxes of rice produced at a factory are normally distributed with a
mean of 20 ounces and a standard deviation of 1.5 ounces. Consider a shipment of 1500 boxes of rice.
How many of the boxes will weigh 18 ounces or less?
138 boxes
154 boxes
632 boxes
781 boxes

Answers

The number of boxes will weigh 18 ounces or less will be 138. Then the correct option is A.

What is a normal distribution?

The z-score is a statistical evaluation of a value's correlation to the mean of a collection of values, expressed in terms of standard deviation.

The z-score is given as

z = (x - μ) / σ

Where μ is the mean, σ is the standard deviation, and x is the sample.

The weights of boxes of rice produced at a factory are normally distributed with a mean of 20 ounces and a standard deviation of 1.5 ounces.

Consider a shipment of 1500 boxes of rice.

Then the number of the boxes will weigh 18 ounces or less will be

z = (18 - 20) / 1.5

z = -1.33

Then the probability will be

P(x ≤ 18) = P(z ≤ -1.33)

P(x ≤ 18) = 1 - P(z > -1.33)

P(x ≤ 18) = 1 - [1 - P(z < -1.33)]

P(x ≤ 18) = P(z < -1.33)

P(x ≤ 18) = 0.091211

Then the number of the boxes will weigh 18 ounces or less will be

⇒ 0.091211 x 1500

⇒ 136.8

approximately 138 boxes.

Then the correct option is A.

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Find the indicated conditional probability
using the following two-way table:
Grade
Drive to school Take the bus
Walk
Sophomore
2
25
3
Junior
13
20
2
Senior
25
5
5
P(Take the bus | Junior) = [?]
Round to the nearest hundredth.

Answers

Using it's concept, it is found that the desired probability is given by:

P(Take the bus | Junior) = 0.5714 = 57.14%.

What is a probability?

A probability is given by the number of desired outcomes divided by the number of total outcomes.

In this problem, we have that out of the 13 + 20 + 2 = 35 Junior students, 20 take the bus, hence the probability is given by:

P(Take the bus | Junior) = 20/35 = 0.5714 = 57.14%.

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1. How many ways can Grant arrange 3 of his 10 plants on a window ledge?
2. A parade organizer received 8 entries for floats. How many ways can he arrange 4 floats out of the 8 entries?


3. Express 4! in expanded form.


4. The number of ways 15 members of a 24-member club can be arranged. ( use permutation notation). PLEASE HELP ME!! and thankyou

Answers

The number of ways that Grant can arrange 3 of the 10 plants is 120 ways and the number of ways that 4 floats out of 8 can be arranged is 70 ways.

How can these combination problems be solved?

Grant can arrange 3 out of 10 plants in the following number of ways:

= 10!/ ((10! - 3!)3!)

= ( 10 x 9 x 8) / (3 x 2)

= 120 ways

The parade organizer can arrange 4 floats out of 8 as:

= 8!/((8! - 4!)4!)

= (8 x 7 x 6 x 5) / (4 x 3 x 2)

= 70 ways

When 4! is written in expanded form, it comes out as:

= (4 x 3 x 2)

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Solve-2x6x + 9.
A. x > -3
B. x < -5
OC. x>-5
D. x <-3

Answers

Step-by-step explanation:

please mark me as brainlest

Answer:

[tex]x < - 5[/tex]

Step-by-step explanation:

[tex] - 2x - 6 > x + 9[/tex]

[tex] - 2x - x > 9 + 6[/tex]

[tex] - 3x > 15[/tex]

[tex] \frac{ - 3x}{ - 3} > \frac{15}{ - 3} [/tex]

[tex]x < - 5[/tex]

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