fm15 5 - = $756 $77 = $833 million Value of equity = Total...

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Answers and Solutions: 15 - 5 15-6 a. 2 op V = 08 . 0 12 . 0 000 , 108 $ = $2,700,000. b. 0 1 2 3 N | | | | | $80,000 $100,000 $108,000 $ 71,428.57 79,719.39 2,152,423.47 $2,303,571.43 15-7 a. 3 op V = 07 . 0 13 . 0 ) 07 . 1 ( 40 $ = $713.33. b. 0 1 2 3 4 N | | | | | | -20 30 40 ($ 17.70) 23.49 3 op V = 713.33 522.10 753.33 $527.89 c. Total value t=0 = $527.89 + $10.0 = $537.89. Value of common equity = $537.89 - $100 = $437.89. Price per share = 0 . 10 89 . 437 $ = $43.79. 15-8 Total corporate value = Value of operations + marketable securities
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Unformatted text preview: = $756 + $77 = $833 million. Value of equity = Total corporate value – debt – Preferred stock = $833 – ($151 + $ 190) - $76 = $416 million. 15-9 Total corporate value = Value of operations + marketable securities = $651 + $47 = $698 million. Value of equity = Total corporate value – debt – Preferred stock = $698 – ($65 + $131) - $33 = $469 million. Price per share = $469 / 10 = $46.90. WACC = 12% g = 8% WACC = 13% g = 7%...
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This note was uploaded on 07/13/2011 for the course FIN 4414 taught by Professor Staff during the Spring '08 term at University of Florida.

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