Does the equity of shareholders have clear economic meaning
Does the equity of shareholders represents the savings a company has accumulated by the years?
Expert
No. The number that appears in the Equity of Shareholder of a company which was founded several years ago is just a number that balances the balance sheet. This does not have a clear economic meaning.
XY Corporation is an all equity firm with a total value of $20 million. It needs an additional capital of $5 million, which may be either equity, or debt at the interest rate of 10%. After the new capitalization, the expected EBIT is $5 million, with standard deviatio
Who introduced put–call parity?
A company currently pays a dividend of $3.75 per share, D0 = 3.75. It is estimated that the company's dividend will grow at a rate of 15% percent per year for the next 2 years, then the dividend will grow at a constant rate of 7% the
Jenny is looking to invest in some 5-year bonds which pay annual coupons of 6.25 % and are presently selling at $912.34. What is the present market yield on these bonds? (Round to the closest Answer.) (1) 9.5% (2) 8.5% (3) 6.5% (4) 7.5%
Who explained put–call parity?
Who explained market-neutral delta hedging?
Atlas Realty Company is interested in buying a house and renting it out for $12,000 a year, collecting the rent in advance each year. This will depreciate the house over 25 years; however sell it after 15 years at twice its purchase price. The maintenance expenditures
ABC Corporation stock sells at $27 per share and its dividend per share is $1.20. ABC has price-earnings ratio of 16. The company contains $40 million worth of bonds, selling at par, with 8.5% coupon. The EBIT of ABC is of $12 million and its tax rate is 30%. Calculat
There are four methods a company can utilize the money this generates: a) Buying other assets or companies; b) Reducing debt of it; c) Distribute this to shareholders, and d) Increasing cash holdings of it.
The market risk premium is difference among the historical return upon the stock market and the risk-free rate, for yearly. Why is this negative for some years?
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