Question: Will you please help me understand these questions please? I appreciate your help Blue Rolt purchased a ware house, income=$763,000 per year, Net operating income

Will you please help me understand these questions please? I appreciate your help

  1. Blue Rolt purchased a ware house, income=$763,000 per year, Net operating income $610,000 per year. Blue paid $60 per square foot for the 105,000 square building. What is the capitalization rate based on the purchase price?
  2. The adjustment present value approach to valuation makes sense to use when

= A firm is expected to go through a transaction that calls for a high use of debt that will be paid down over a few years

  1. While conducting a valuation study of Adco Corp. for a potential purchase of the business, your firm determined that the terminal value of Adco at the end of a four year planning period is $452,000. The firms capital structure is 20% debt and 80% equity, the cost of debt is 502%, and the cost of equity is 9.1%. The firm has a 30% tax rate. If the present value of planning period cash flows is $252,300 the enterprise value for cross is?
  2. You are valuing Rubicon, a private firm that distribute household decorative items, and you have identified, several comparable firms that are publicly owned from which to calculate estimated price to earnings. Market value per share $43.20 earnings per share for last year of $3.17 per share, dividends for last year that was $095 per share.
  3. You are using the adjusted present value approach to value the Greenside Co, and you have determined that the value of unlevered firm is $22,105,137 you calculate the project interest tax saving to be as

Year 1 $250,000

Year 2 $200,000

Year 3 $ 175,000

Year 5 and beyond $150,000

Assuming the cost of debt is 6% and the tax rate is 24%, what is the enterprise value of Greenside?

  1. Assuming your analysis as of 1/1/22, and the first-semi-annual interest payment is due on 7/1/22, what is the promised yield-to maturity coupon 6%, maturity 1/1/2026, Rating Baa/BBB-, and price 93.6290 for this bond?

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