Carla Vista Co. is considering these two alternatives for financing the purchase of a fleet of airplanes. 1. Issue 55,000 shares of common stock at $48 per share. (Cash dividends have not been paid nor is the payment of any contemplated.) 2. Issue 13%, 10-year bonds at face value for $2,640,000. It is estimated that the company will earn $809,000 before interest and taxes as a result of this purchase. The company has an estimated tax rate of 40% and has 94,500 shares of common stock outstanding prior to the new financing. Determine the effect on net income and earnings per share for issuing stock and issuing bonds. Assume the new shares or new bonds will be outstanding for the entire year. (Round earnings per share to 2 decimal places, e. g. $2.66.)
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Business, 22.06.2019 17:30
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Business, 22.06.2019 19:10
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Business, 22.06.2019 20:10
Mikkelson corporation's stock had a required return of 12.50% last year, when the risk-free rate was 3% and the market risk premium was 4.75%. then an increase in investor risk aversion caused the market risk premium to rise by 2%. the risk-free rate and the firm's beta remain unchanged. what is the company's new required rate of return? (hint: first calculate the beta, then find the required return.) do not round your intermediate calculations.
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Business, 23.06.2019 01:30
What is the name of the company and the stock symbol you chose? what is the p/e ratio? what information did you find about the company? why did you choose this stock? company name: stock symbol: p/e ratio: information about the company: why did you choose this stock?
Answers: 2
Carla Vista Co. is considering these two alternatives for financing the purchase of a fleet of airpl...
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