# 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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