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NEW QUESTION: 1
Van Slyke Inc. has $5,000,000 in assets, and currently has no debt--it is financed entirely with 200,000 shares of common stock, each of which trades at $25 per share. The firm's EBIT is expected to be
$1,250,000 at year-end (i.e., at t=1). The corporate tax rate is 40 percent. Van Slyke expects to pay out a dividend at year-end which is 50 percent of its net income. The company estimates that its earnings and dividends grow at a constant rate of 3 percent a year. The company is considering a recapitalization where they would issue $1,000,000 of debt at a before- tax cost of 10 percent. The proceeds from thedebt issued would be used to repurchase shares of the company's stock at $25 per share. The company's investment bankers estimate that the cost of equity capital would be 16 percent after the recapitalization. What would you expect the company's stock price to be immediately following the recapitalization? Assume that the dividend has not yet been paid.
A. $16.59
B. $33.17
C. $12.15
D. $27.25
E. $20.98
Answer: A
Explanation:
Explanation/Reference:
Explanation:
Step 1 Find EPS:
EBIT$1,250,000
Interest expense100,000 = 0.10($1,000,000)
Earnings before taxes$1,150,000
Taxes (40%)460,000
Net income$690,000
Shares purchased = $1,000,000/$25 = 40,000.
Shares remaining = 200,000 - 40,000 = 160,000.
EPS = $690,000/160,000 = $4.3125.
Step 2 Find D1:
EPS(1)P/o = D1
$4.3125 (0.50) = $2.1563.
Step 3 Find Po:
ks = D1/Po + g
0.16 = $2.1563/Po + 0.03
Po = $16.59.

NEW QUESTION: 2
How does portfolio management enable the most effective balance of organizational change and business as usual?
1.ensure change initiatives are agreed at the appropriate management level
2.prioritize change initiatives in line with strategic objectives
3.review change initiatives regularly in terms of progress, cost, risk, benefits and strategic contribution
4.cancel change initiatives if other initiatives appear with a better predicted return
A. 1,3,4
B. 1, 2, 3
C. 1,2,4
D. 2,3,4
Answer: D

NEW QUESTION: 3
You deploy an application as a cloud service in Azure. The application consists of five instances of a web role. You need to move the web role instances to a different subnet. Which file should you update?
A. Diagnostics configuration
B. Service definition
C. Service configuration
D. Network configuration
Answer: C
Explanation:
The service configuration file specifies the number of role instances to deploy for each role in the service, the values of any configuration settings, and the thumbprints for any certificates associated with a role. If the service is part of a Virtual Network, configuration information for the network must be provided in the service configuration file, as well as in the virtual networking configuration file. The default extension for the service configuration file is .cscfg.
Reference: https://msdn.microsoft.com/en-us/library/azure/ee758710.aspx

NEW QUESTION: 4
View the exhibit, which contains the output of a debug command, and then answer the question below.

What statement is correct about this FortiGate?
A. It is currently in system conserve mode because of high memory usage.
B. It is currently in FD conserve mode.
C. It is currently in system conserve mode because of high CPU usage.
D. It is currently in kernel conserve mode because of high memory usage.
Answer: A