Question: Please help please please please asap help please it important Question 10 (1.33 points) ABC Inc. has a value of operations of $20,000, short-term investments


Question 10 (1.33 points) ABC Inc. has a value of operations of $20,000, short-term investments of $1,000, $6,000 in debt, and 275 shares outstanding. The company plans on distributing $500 through stock repurchases. Assuming the repurchase does not signal new information, what will the stock price be immediately following the repurchase? $56.36 $51.90 $58.01 $54.55 $52.73 ABC Systems is considering a new project with a 4-year economic life. The project's equipment would cost $80,000 and be depreciated using the MACRS 3-year rates (33%, 45%, 15%, and 7%), and it would have no salvage value. Net working capital would need to be increased by $15,000 at the beginning of the project, but it could be recovered at the end of the project's life. Revenues are expected to be constant at $75,000 over the project's life, and operating costs are expected to be constant at $25,000 over the project's life. The tax rate is 35%, and there is no inflation. What are the net cash flows in Year 0 and Year 4? -$80,000: $34,460 -$95,000: $49,460 -$80,000: $43,860 -$80,000: $49,460 -$95,000: $43,860 Question 14(1.33 points) Consider the Modigliani and Miller (M&M) theory of capital structure. Assume there are NO taxes and NO bankruptcy costs. Which of the following statements is / are correct? 1. Firm value always increases as more debt is added II. Firm value stays constant as more debt is added III. WACC always decreases as more debt is added IV. WACC always increases as more debt is added V. WACC stays constant as more debt is added I and IV only II and III only None of the statements are correct II and V only I and III only
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