Business, 29.05.2020 18:00 Magalaki713

Tapley Inc. currently has total capital equal to $5 million, has zero debt, is in the 40% federal-plus-state tax bracket, has a net income of$1 million, and distributes 40% of its earnings as dividends. Net income is expected to grow at a constant rate of 5% per year, 200,000 shares of stock are outstanding, and the current WACC is 13.40%.

The company is considering a recapitalization where it will issue $1 million in debt and use the proceeds to repurchase stock. Investment bankers have estimated that if the company goes through with the recapitalization, its before-tax cost of debt will be 11% and its cost of equity will rise to 14.5%.

What is the stock's current price per share (before the recapitalization)?

Answers: 1

Show answers

Another question on Business

Business, 21.06.2019 23:30

San ruiz interiors provides design services to residential and commercial clients. the residential services produce a contribution margin of $450,000 and have traceable fixed operating costs of $480,000. management is studying whether to drop the residential operation. if closed, the fixed operating costs will fall by $370,000 and san ruiz’ income will

Answers: 3

Answer

Business, 22.06.2019 11:40

You are a manager at asda. you have been given the demand data for the past 10 weeks for swim rings for children. you decide to run multiple types of forecasting methods on the data to see which gives you the best forecast. if you were to use exponential smoothing with alpha =.8, what would be your forecast for week 22? (the forecast for week 21 was 1277.) week demand 12 1317 13 1307 14 1261 15 1258 16 1267 17 1256 18 1268 19 1277 20 1277 21 1297

Answers: 3

Answer

Business, 22.06.2019 12:50

Performance bicycle company makes steel and titanium handle bars for bicycles. it requires approximately 1 hour of labor to make one handle bar of either type. during the most recent accounting period, barr company made 7,700 steel bars and 2,300 titanium bars. setup costs amounted to $35,000. one batch of each type of bar was run each month. if a single company-wide overhead rate based on direct labor hours is used to allocate overhead costs to the two products, the amount of setup cost assigned to the steel bars will be:

Answers: 2

Answer

Business, 22.06.2019 18:40

Under t, the point (0,2) gets mapped to (3,0). t-1 (x,y) →

Answers: 3

Answer

You know the right answer?

Tapley Inc. currently has total capital equal to $5 million, has zero debt, is in the 40% federal-pl...

Questions