What was PacifiCorp Worth before its acquisition by Berkshire? Are we overpaying? We are not overpaying for PacifiCorp. We purchased PacifiCorp, from Scottish Power plc, for $5.1 billion in cash and $4.3 billion in liabilities and preferred stock, for a total of $9.4 billion. Since PacifiCorp is not a publicly traded company, we must use valuation multiples from comparable firms to determine the value of the firm.
Since Artforever.com is a privately held company, there is little information available to determine the appropriate cost of capital and rate of equity. Thus, a comparable analysis was done utilizing a similar publicly traded company, Arttoday.net. Since Arttoday.net and Artforever.com operate in the same industry, this comparable analysis will provide the information necessary to extrapolate a reasonable estimate of the cost of capital and rate of equity. Arttoday.net has a beta 1.50 and a debt to equity ratio of 0.75. The beta reported is based on the complete capital
Significant influence over Lennon was achieved by this acquisition. Lennon distributed a dividend of $2.50 per share during 2008 and reported net income of $670,000. What was the balance in the Investment in Lennon Co. account found in the financial records of Pacer as of December 31, 2008? A. $2,040,500 B.
Calculate the company's return on equity as a percentage. (0.5 points) 60% b. A company makes a net profit before tax of $5,000 and has total assets with a value of $10,000. Calculate the company's return on assets as a percentage. (0.5 points) 50% c. A company has $1,400 in liabilities and $1,500 in assets.
b. Shareholders are not taxed on corporate income until it is distributed to them. c. Shareholder-employees can participate in employee fringe benefits d. Corporate shareholders cannot deduct corporate losses from their income. Answer: d 2. Corporation AB had a net long-term capital loss is 2005 and net operating loss in 2004.
Operating leases B. Accounts receivable C. Inventory D. Accounts payable 16) Compute the payback period for a project with the following cash flows, if the company’s discount rate is 12%. Initial outlay = $450 Cash flows: Year 1 = $325 Year 2 = $65 Year 3 = $100 A. 3.43 years B. 3.17 years C. 2.88 years D. 2.6 years 17) For the NPV criteria, a project is acceptable if the NPV is __________, while for the profitability index, a project is acceptable if the profitability index is __________.
Muhammad Qureshi Jeff Nowakowski Phase II: Southwest Current Assets: Accounts Receivables a. Analyzing Receivables: There is limited information about the bad debt expense or the allowance for doubtful accounts on Southwest’s 10k. According to the 10k, accounts receivables are carried at cost and the allowance for doubtful accounts was immaterial so the company did not provide figures for the account. The largest source of accounts receivable for Southwest is credit cards companies. These receivables are associated with ticket sales for future travel and amounts from business partners involved in firm’s frequent flyer programs. The fact that Southwest was not required to disclose actual figures on their allowance for doubtful accounts and bad debt expense because of their immateriality indicates that the company does very well with collecting their receivables.
With this new development, if we assume that the previous 4,796,000 shares of common stock that were originally issued in March of 1993 are now also worth $1 per share, this gives a total of $4,796,000. The total valuation of the company will then be $800,000 + $4,796,000 = $5,596,000. This is the value that we believe to represent the valuation of Neverfail as of November 1994. After round 1 of VC investment: Due to the deal with the Pacific Ridge, Neverfail share prices were going for $1.50 per share The Company was valued at $9 million as of December 1994 according to the case study. Initial value of Pacific ridge investment (December 1995) is: 666,667 * $1.50 + 133,333 * $0.3 = $1,040,000.4 (initial investment, exhibit 7).
Financial Markets (N13302) Mock Paper (2010/2011) Question 1 (a) BSC Industries has just paid its annual dividend of $10 per share. The dividend is expected to grow at a constant rate of 5% indefinitely. The beta of BSC industries stock is 1.3, the risk-free rate is 2%, and the market risk premium is 7%. (1) What is the intrinsic value of the stock? (2) What would be your estimate of intrinsic value if you believed that the stock was riskier, with a beta of 1.7?
Ignoring taxes, the correct opportunity cost for this machine in capital budgeting decisions is: A. $75,000 B. $25,000 C. $20,000 D. $5,000 4. What is the amount of the operating cash flow for a firm with $500,000 profit before tax, $100,000 depreciation expense, and a 35% marginal tax rate? A.