Wysiwyg corporation is 100% equity financed. it is expected to earn $10 per share in pretax cash flow every year in perpetuity. profits after tax are paid out annually as dividends. there are 1 million shares outstanding. the corporation tax rate is 35%. the required return on wysiwyg equity (and hence its assets) is 11%. ignore any taxes paid at the personal level.

a.) what is wysiwyg corporation’s annual after-tax cash flow? what will be the market capitalizationof wysiwig’s equity and the value of the firm?

b.) now suppose wysiwyg decides to undertake a leveraged recapitalization by issuing $12 million in debt at an annual interest rate of 7% and using the proceeds to buy back shares of equity. assume that thefirm’s operations do not change. what is the present value of the tax shield from the interest onwysiwyg’s debt?

c.) what must be the firm’s total (debt plus equity) market capitalization after the recapitalization? what is the value of the firm’s debt and the value of its equity? what is the net gain to the equity shareholders of the firm?

d.) how many shares had to be bought back to accomplish the recapitalization and what is the new share price?

The following are the current month's balances for abc financial services, inc. before preparing the trial balance. accounts payable $ 10,000 revenue 6,000 cash 3,000 expenses 17,500 furniture 10,000 accounts receivable 14,000 common stock ? notes payable 6,500 what amount should be shown for common stock on the trial balance? a. $48.000b. $12.500c. $27.000d. $28.000

The starr theater, owned by meg vargo, will begin operations in march. the starr will be unique in that it will show only triple features of sequential theme movies. as of march 1, the ledger of starr showed: cash $3,150, land $22,000, buildings (concession stand, projection room, ticket booth, and screen) $10,000, equipment $10,000, accounts payable $7,300, and owner’s capital $37,850. during the month of march, the following events and transactions occurred.mar. 2 rented the three indiana jones movies to be shown for the first 3 weeks of march. the film rental was $3,600; $1,600 was paid in cash and $2,000 will be paid on march 10.3 ordered the lord of the rings movies to be shown the last 10 days of march. it will cost $200 per night.9 received $4,500 cash from admissions.10 paid balance due on indiana jones movies rental and $2,200 on march 1 accounts payable.11 starr theater contracted with adam ladd to operate the concession stand. ladd is to pay 15% of gross concession receipts, payable monthly, for the rental of the concession stand.12 paid advertising expenses $900.20 received $5,100 cash from customers for admissions.20 received the lord of the rings movies and paid the rental fee of $2,000.31 paid salaries of $2,900.31 received statement from adam ladd showing gross receipts from concessions of $6,000 and the balance due to starr theater of $900 ($6,000 × 15%) for march. ladd paid one-half the balance due and will remit the remainder on april 5.31 received $9,200 cash from customers for admissions.1.) enter the beginning balances in the ledger.2.) journalize the march transactions. starr records admission revenue as service revenue, rental of the concession stand as rent revenue, and film rental expense as rent expense. (credit account titles are automatically indented when the amount is entered. do not indent manually. record journal entries in the order presented in the problem. if no entry is required, select "no entry" for the account titles and enter 0 for the amounts.)3.) post the march journal entries to the ledger. (post entries in the order of journal entries presented in the previous question.)

Identify the level of the literature hierarchy for u.s. gaap to which each item belongs