Suppose we are planning to buy a company with the following forecasts:

Year 1 2 3 & afterwards
FCF $5 million $ 5.5 million 3% constant growth rate
Debt level $50 million $35 million Constant debt to equity ratio. Capital will be 50% debt and 50% equity, wd = ws = 0.5.

The cost of debt is 5%
The cost of equity is 20%
The tax rate is 40%
The company has 15 million shares outstanding
The current stock price is $2.05
The company is currently holding no financial assets.
The company has $3,000,000 in debt.
WACC, the cost of capital, is equal to 11.5%
RSU, the cost of unlevered equity, is equal to 12.5%

a. Calculate the value of the debt tax shield.
b. Calculate the horizon value of the target.

Steele bicycle manufacturing company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales. steele produces and sells only 10,000 bikes each year. due to the low volume of activity, steele is unable to obtain the economies of scale that larger producers achieve. for example, steele could buy the handlebars for $31 each: they cost $34 each to make. the following is a detailed breakdown of current production costs: after seeing these figures, steele's president remarked that it would be foolish for the company to continue to produce the handlebars at $34 each when it can buy them for $31 each. calculate the total relevant cost. do you agree with the president's conclusion?

Find the interest rate for a $4000 deposit accumulating to $5234.58, compounded quarterly for 9 years

The textbook defines ethics as “the principles of conduct governing an individual or a group,” and specifically as the standards one uses to decide what their conduct should be. to what extent do you believe that what happened at bp (british petrolium) is as much a breakdown in the company’s ethical systems as it is in its safety systems, and how would you defend your conclusion?