07054 093428 SMB 026928 007418 362993 000062 012067 041789 012067 HML 005479

07054 093428 smb 026928 007418 362993 000062 012067

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1.07054 0.93428 SMB 0.26928 0.07418 3.62993 0.00062 0.12067 0.41789 0.12067 HML -0.05479 0.06137 -0.89285 0.37576 -0.17772 0.06814 -0.17772
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Upper 95.0% 0.00383 1.07054 0.41789 0.06814
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SUMMARY OUTPUT Regression Statistics Multiple R 0.97260 R Square 0.94595 Adjusted R Square 0.94306 Standard Error 0.01405 Observations 60 ANOVA df SS MS F ignificance F Regression 3 0.19356 0.06452 326.71151 1.94E-035 Residual 56 0.01106 0.00020 Total 59 0.20462 Coefficients tandard Erro t Stat P-value Lower 95%Upper 95% Lower 95.0% Intercept -0.00053 0.00184 -0.28720 0.77502 -0.00422 0.00316 -0.00422 Mkt-RF 0.97967 0.03912 25.04468 0.00000 0.90131 1.05803 0.90131 SMB 0.62095 0.08533 7.27739 0.00000 0.45002 0.79188 0.45002 HML -0.22366 0.07058 -3.16876 0.00248 -0.36506 -0.08227 -0.36506
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Upper 95.0% 0.00316 1.05803 0.79188 -0.08227
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Chapter 13 The Cost of Capital for Goff Computer, Inc. Input area: Bond maturity Book value (millions) Price 4/15/2013 $ 603 101.645 9/10/2013 $ 500 100.329 4/1/2014 $ 500 102.059 4/15/2014 $ 300 106.797 9/10/2015 $ 400 103.517 4/1/2018 $ 502 116.241 6/15/2019 $ 605 116.149 4/1/2021 $ 398 109.350 4/15/2028 $ 382 119.359 4/15/2038 $ 400 117.778 9/10/2040 $ 400 105.676 BV of debt (balance sheet) $ 4,990 BV of equity per share $ 5.620 Stock price $ 8.56 Shares outstanding (billions) 1.73 Beta 1.530 3-month Treasury bill rate 0.04% Market risk premium 7.00% Tax rate 35% Output area: 2) 10.75% 3) Company Beta Apple Inc. 0.91 Dell 1.53 Hewlett Packard 1.42 Ingram Mico Inc. 1.42 Tech Data Corp. 1.16 Electronics for Imaging 1.51 R E from CAPM
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Digi International 1.40 Agilysis, Inc. 2.85 MIPS Technologies 1.55 Silicon Graphics 2.28 Industry Average 1.60 11.26% 4) 4/15/2013 $ 603 0.12 9/10/2013 500 0.10 4/1/2014 500 0.10 4/15/2014 300 0.06 9/10/2015 400 0.08 4/1/2018 502 0.10 6/15/2019 605 0.12 4/1/2021 398 0.08 4/15/2028 382 0.08 4/15/2038 400 0.08 9/10/2040 400 0.08 Total $ 4,990 1.00 5) Book value of equity $ 9.7226 billion Market value of equity $ 14.8088 billion Book value of company $ 14.7126 million Market value of company $ 20.2393 million WACC using book value 7.27% WACC using market value 8.31% R E with industry beta Book value (millions) Percent of total
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YTM 0.603% 0.998% 0.581% 0.744% 1.024% 2.424% 3.135% 3.334% 5.250% 5.227% 5.018%
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101.645 $ 612.919 0.11 0.603% 0.07% 0.07% 100.329 501.645 0.09 0.998% 0.10% 0.09% 102.059 510.295 0.09 0.581% 0.06% 0.05% 106.797 320.391 0.06 0.744% 0.04% 0.04% 103.517 414.068 0.08 1.024% 0.08% 0.08% 116.241 583.530 0.11 2.424% 0.24% 0.26% 116.149 702.701 0.13 3.135% 0.38% 0.41% 109.350 435.213 0.08 3.334% 0.27% 0.27% 119.359 455.951 0.08 5.250% 0.40% 0.44% 117.778 471.112 0.09 5.227% 0.42% 0.45% 105.676 422.704 0.08 5.018% 0.40% 0.39% $ 5,430.53 1.00 2.47% 2.55% Quoted price Market value (millions) Percent of total Yield to Maturity Book values Market values
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Chapter 16 Stephenson Real Estate Recapitalization Input area: Shares outstanding 12,000,000 Share price $ 48.50 Purchase price $ 45,000,000 Increase in cash flow $ 11,000,000 Current cost of capital 11.50% YTM on new debt 7.00% Equity weight in new capital structure 70% Tax rate 40% Output area: 2. Assets $ 582,000,000 Total assets $ 582,000,000 3. a) Aftertax earnings increase $ 6,600,000 NPV $ 12,391,304 b) Assets $ 582,000,000 NPV of project 12,391,304 Total assets $ 594,391,304 New share price $ 49.53 New shares issued 908,492 Price c) Cash $ 45,000,000 Old assets 582,000,000 NPV of project 12,391,304 Total assets $ 639,391,304 Total New shares outstanding 12,908,492
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New share price $ 49.53 d) PV of the project $ 57,391,304 Old assets $ 582,000,000 PV of project 57,391,304 Total assets $ 639,391,304 4. a) Market value of company $ 657,391,304 b) Value unlevered $ 639,391,304 Tax shield 18,000,000 Total assets $ 657,391,304 New stock price $ 51.03
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Equity $ 582,000,000 Total Debt & Equity $ 582,000,000 Equity $ 594,391,304 Total Debt & Equity $ 594,391,304 Equity $ 639,391,304 Total Debt & Equity $ 639,391,304
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Equity $ 639,391,304 Total Debt & Equity $ 639,391,304 Debt $ 45,000,000 Equity 612,391,304 Total Debt & Equity $ 657,391,304
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Chapter 17 McKenzie Corporation's Capital Budgeting Input Area: Probability Recession 0.30 $ 25,000,000 $ 27,000,000 Normal 0.50 $ 30,000,000 $ 37,000,000 Expansion 0.20 $ 48,000,000 $ 57,000,000 Face value of debt $ 29,000,000 Cost of expansion $ 5,700,000 Output Area: 1) Expected value of firm Without expansion $ 32,100,000 With expansion $ 38,000,000 Expected NPV $ 200,000 2) Value of debt Recession $ 25,000,000 $ 27,000,000 Normal $ 29,000,000 $ 29,000,000 Expansion $ 29,000,000 $ 29,000,000 Expected value of debt $ 27,800,000 $ 28,400,000 3) Value of equity Recession $ - $ - Normal $ 1,000,000 $ 8,000,000 Expansion $ 19,000,000 $ 28,000,000 Expected value of equity $ 4,300,000 $ 9,600,000 Without expansion With expansion Without expansion With expansion Without expansion With expansion
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Bondholder gain with expansion $ 600,000 Stockholder gain with expansion $ 5,300,000 Stockholder NPV $ (400,000)
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