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    Capital Structure and Firm Value

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    Keep paid-in capital separate from earned capital

    O Why is it important to keep paid-in capital separate from earned capital? o As an investor, is paid-in capital or earned capital more important? Why? o As an investor, are basic or diluted earnings per share more important? Why? Please make the response coherent and thank you for getting me started on this!

    Earnings Per Share

    Integrative-Optimal capital structure Medallion Cooling Systems, Inc., has total assets of $10,000,000, EBIT of $2,000,000, and preferred dividends of $200,000 and is taxed at a rate of 40%. In an effort to determine the optimal capital structure, the firm has assembled data on the cost of debt, the number of shares of common st

    NYCK Manufacturing: Analyze two alternative capital structures

    NYCK Manufacturing Case NYCK Manufacturing, an established producer of printing equipment, expects its sales to remain flat for the next 3 to 5 years because of both a weak economic outlook and an expectation of little new printing technology development over that period. On the basis of this scenario, the firms board has ins

    Common equity capital structure

    Abc has an all common equity capital structure.it has 200,000 shares outstanding at a par of $2.00. growth expectations have lowered .previously it plowed back most of its earnings which earned 12% per year.The future growth rate will be 5% and dividends would increase.New investments that would earn a required 14% would amount

    Gordon's Position on AT&T's Capital Structure

    A utility company is allowed to charge prices high enough to cover all costs, including its cost of capital. Public service commissions are supposed to take actions to stimulate companies to operate as efficiently as possible in order to keep costs, hence prices, as low as possible. Some time ago, AT&T's debt ratio was about 3

    New Issue Junk Bond Market and Capital Structure Choice

    The development of the new issue junk bond market had important implications for capital structure choice. The existence of a viable junk bond market means that firms can comfortably maintain higher degrees of leverage than they could prior to the development of this market. Do you agree or disagree? Justify your answer.

    Levered and Unlevered Firms: Calculate value of firm given facts

    An unlevered firm has a cost of capital of 14% and earnings before interest and taxes of $150,000. A levered firm with the same operations and assets has both a book value and a face value of debt of $700,000 with a 7% annual coupon. The applicable tax rate is 35%. What is the value of the levered firm? Choose one answer.

    2 to 3 paragraphs apa format 2 to 3 references

    You are Doc Vinny, the current CEO of Vitruvian Health and the potential CEO of Vitruvian Physician Partners (VPP) and chairman of the board of Vitruvian, Inc. In preparation for a meeting with the current CEO of Vitruvian Physician Partners, you are gathering information about the products and services provided by each of the V

    Apa format with 2 to 3 references need asap thank u

    You are Doc Vinny, and although you have been hand-picked by Dr. Montenegro to be his successor, your nomination must be confirmed as the VPP president and chairman of the board of Vitruvian, Inc. The other senior leaders of the health plan (VHP) and of the physician group (VPP) must meet to decide to confirm or reject your nomi

    Mutual of Chicago Insurance: Analyze the Bon Temps Company capital structure

    Case 9-23, parts a-g: Mutual of Chicago Insurance Company. Stock Evaluation: Robert Balik and Carol Kiefer are senior vice presidents of the Mutual of Chicago Insurance Company. They are co-directors of the company's pension fund management division, with Balik having responsibility for fixed-income securities (primarily bon

    Company Structure: How Much does it Matter?

    Comments on this statement that "...in a fast-changing business environment, structure is becoming less important, while processes, rewards, and people are becoming more important....(and)....managers can influence performance and culture-but only by acting through the design policies that effect behavior..." Galbraith (2002),

    Proportions of Debt & Equity Financing

    The required return on debt (before taxes) is 7.5%, the required return on equity is 15%, and the cost of capital is 10%. If the marginal income tax rate is 40%, what are the proportions of debt and equity financing?

    Organization's Capital Structure

    What components make up an organization's capital structure? How might an organization go about developing its optimal capital structure? In addition to quantitative variables, what other factors should an organization consider when it is making capital structure decisions?

    Capital Structure

    You are CEO of a high-growth technology firm. You plan to raise $180 million to fund an expansion by issuing either new shares or new debt. With the expansion, you expect earnings next year of $24 million. The firm currently has 10 million shares outstanding, with a price of $90 per share. Assume perfect capital markets: A

    Capital Structure

    Why might firms whose sales levels change drastically over time choose to use debt only sparingly in their capital structures? What condition would cause capital structure management to be a meaningless activity?

    Capital structure decision and the cost of capital

    3. What is meant by "an optimal capital structure of the firm"? Be specific. Consider three companies: Intel, Alcoa, and McDonalds. Reflect on the nature of the business of these three companies. You are recommended to also get to the web site of one company in each of these categories. You might also check what the beta of

    Payout Policy and Capital Structure

    "Many companies use stock repurchases to increase earnings per share. For example, suppose that a company is in the following position: Net profit $10 million Number of shares before repurchase 1 million Earnings per share $10 Price-earnings ratio 20 Share price $200 The company now repurchases 200,000 shares at $200 a sh

    Bixton Company's new chief financial officer is evaluating Bixton's capital structure. She is concerned that the firm might be underleveraged, even though the firm has larger-than-average research and development and foreign tax credits when compared to other firms in its industry. Her staff prepared the industry comparison shown here.

    Bixton Company's new chief financial officer is evaluating Bixton's capital structure. She is concerned that the firm might be underleveraged, even though the firm has larger-than-average research and development and foreign tax credits when compared to other firms in its industry. Her staff prepared the industry comparison show

    EPS and capital structure

    Calculation of Share Value Estimates Associated with Alternative capital Structures Capital Structure Expected Estimated Estimated Debt Ratio EPS Required Return Share Value 0% $1.75 11.40% 10 1.90 11.80% 20 2.25 12.50% 30 2.55 13.25% 40 3.18 18.00% 50 3.06 19.00% 60 3.10 25.00% Given th

    Optimal capital structure for Time Warner

    I have to answer the question below in 450 words. I have been reading the chapter and don't fully understand this question: Devise the optimal capital structure for Time Warner in light of current, business, economic, and industry trends. Please cite any sources used.

    Constant growth model (What value would James estimate for this firm?) - Medtrans

    Medtrans is a profitable firm that is not paying a dividend on its common stock. James Weber, an analyst for A. G. Edwards, believes that Medtrans will begin paying a $1.00 per share dividend in two years and that the dividend will increase 6% annually thereafter. Bret Kimes, one of James' colleagues at the same firm, is less op

    Capital Structure: University Technologies, Inc.

    University Technologies, Inc., (UTI) has a current capital structure consisting of 10 million shares of common stock, $200 million of first-mortgage bonds with a coupon interest rate of 13 percent, and $40 million of preferred stock paying a 5 percent dividend. In order to expand into Asia, UTI will have to undertake an aggressi

    Capital Structure and Leverage

    Elephant books sells paperback books for $7 each. The variable cost per book is $5. at current annual Sales of 200,000 books, the publisher is just breaking even. It is estimated that if the authors royalties are reduced, the variable cost per book will drop by $1. Assume authors royalties are reduced and sales remain consta

    Capital Structure and Leverage for Millman Electronics

    Millman Electronics will produce 60,000 stereos next year. Varibable costs will equal 50% of sales, while fixed costs will total $120,000. At what price must each widget be sold for the company to achieve an EBIT of $95,000?

    Target capital structure: prepare and analyze debt ratios

    THE COMPANY USED IS TARGET Balance Sheet and Market Value of Your Company's Liabilities and Equity Refer to your company's most recent balance sheet. Review the 'liabilities and equity side' of the balance sheet. (a) Short term liabilities (or debt) and long term liabilities Find our from the balance sheet of the co

    Financial targets and Capital Structure for Bixton

    Chapter 17: Problem Sets (pp. 500) Problem B1 (Choosing financial targets) Bixton Company's new chief financial officer is evaluating Bixton's capital structure. She is concerned that the firm might be underleveraged, even though the firm has larger-than-average research and development and foreign tax cred