... 320
Long-term debt 2 17 159 159 311 319 315
Stockholders’ equity 676 72 5 599 502 4 07 324
Number of stores 240 221 211 184 170 1 57
Employees 13,0 57 11,835 9,810 9 ,79 0 9, 075 7, 825
TABLE A.19
INCOME ... Microsoft’s total capital in 19 97 was
$7. 2 billion. With a return of 53 percent, it earned profits on this figure of .53 × 7. 2 =
$3.8 billion. The total cost of the ca...
... market value of Ford is $ 57 billion. The 2-day reduction in float is worth $800
million. This increases the value of Ford to $ 57. 8 billion. The new stock price will be
57. 8/1.14 = $50 .70 per share. ... days
3,518/365
This is a reduction of 22.8 days from the original value of 48 .7 days.
Days in receivables =
300
= 27. 6 days
3,968/365
This is a reduction of 16.2 days from t...
... 3.5
Value of Blue Skies
Horizon, Years PV (Dividends) + PV (Terminal Price) = Value per Share
1 $ 2.68 $72 .32 $75 .00
2 5.26 69 .74 75 .00
3 7. 75 67. 25 75 .00
10 22. 87 52.13 75 .00
20 38 .76 36.24 75 .00
30 ... =
$60
+
$1,060
= $1,0 37. 72
(1.04) (1.04)
2
You invested $1,010 .77 . At the end of the year you receive a coupon payment of $60
and have a bond worth $1,0 37. 72. You...
... of return
)
of return in first asset on first asset
+
(
fraction of portfolio
؋
rate of return
)
in second asset on second asset
For example, autos have a weight of .75 and a rate of return of ... back a cash flow of C
1
= $400,000 in 1 year. Therefore, you
forecasted a profit on the venture of $400,000 – $350,000 = $50,000, and a rate of
return of
Rate of return =
pr...
... Equity
Assets = value of Geothermal’s $6 47 Debt $194 (30%)
existing business
Equity $453 (70 %)
Total value $6 47 Value $6 47 (100%)
There are actually two costs of debt finance. The explicit cost of debt is ... Pretax profit (1 – 2 – 3 – 4) 550,000 –2,000
6. Taxes (40%) 220,000 –800
7. Profit after tax 330,000 –1,200
8. Cash flow from operations (4 + 7) 78 0,000 448,800
Present...
... years of trading have been less than a con-
trol sample of matching firms. See J. R. Ritter, “The Long-Run Performance of Initial Public Offerings,”
Journal of Finance 46 (March 1991), pp. 3– 27.
PROSPECTUS ... bank at a rate of
7. 575 75 percent. Should Tasha sign the lease or should it go with the bank?
Because Tasha is in a 34 percent tax bracket, the aftertax interest rate w...