CASO: MOJITO MINT COMPANY (25)

$15.00

Mojito Mint Company has a debt–equity ratio of .35. The required return on the company’s unlevered equity is 11 percent, and the pretax cost of the firm’s debt is 7.6 percent. Sales revenue for the company is expected to remain stable indefinitely at last year’s level of $18,100,000. Variable costs amount to 75 percent of sales. The tax rate is 40 percent, and the company distributes all its earnings as dividends at the end of each year.

  1. If the company were financed entirely by equity, how much would it be worth?
  2. What is the required return on the firm’s levered equity?
  3. Use the weighted average cost of capital method to calculate the value of the company.
  4. What is the value of the company’s equity?
  5. What is the value of the company’s debt?
  6. Use the flow to equity method to calculate the value of the company’s equity.

 

Solution in excel

Related products

Placeholder
Añadir a la lista de deseos

CASE: New York Times (2)

$20.00

Describe the evolution of NYTD What is NYTD’s strategy? Is organization and control consistent with strategy? What impact did NYTD have on the rest of the Company? Compare NYTD management with the way a venture capital firm manages a new foundation. What is learned from this comparison? 4. What effect did NYTD’s operations have on [...]

Add to cart
Placeholder
Añadir a la lista de deseos

CASE HARVARD: PETROZUATA (35)

$20.00

(PETROZUATA) CASE ANALYSIS: Q1. HOW SHOULD PDVSA FINANCE THE DEVELOPMENT OF THE ORINOCO BASIN? WHAT ARE THE COSTS AND BENEFITS OF USING PROJECT FINANCE INSTEAD OF TRADITIONAL DEBT FINANCE? Q2. WHAT ARE PETROZUATA’A THREE OR FOUR MOST IMPORTANT RISKS? HOW DOES THE DEAL STRUCTURE ADDRESS THESE RISKS? WHO WOULD BEAR THESE RISKS IF THE PROJECT [...]

Add to cart
Placeholder
Navegar por Lista de Deseos

CASE HARVARD: FRIENDLY CARDS (23)

$20.00

En caso de tarjetas amistosas compran los sobres del fabricante de la máquina ¿Si es así, cómo? ¿Deberían las tarjetas amigables adquirir diseños creativos? ¿Deberían las Friendly Cards aceptar la oferta del inversor o grupo de West Coast (Weast Coast) y emitir nuevas acciones?   Solución en Word y Excel.

Add to cart
Placeholder
Navegar por Lista de Deseos

CASE HARVARD: DRESSEN

$30.00

Is Dressen an attractive buyout opportunity? What is the maximum price you can pay, would you be willing to pay for Dressen based on a discounted cash flow valuation? What did Lynch to refloat Dressen? What does a credible cash flow? How much would you pay Lynch for him to stay in the business? Is [...]

Add to cart
Placeholder
Navegar por Lista de Deseos

CASE HARVARD: MURPHY STORES: CAPITAL PROJECTS (29)

$40.00

Actividades y preguntas 1. Describa las dos oportunidades de inversión y por qué cada una de ellas resulta atractiva para Murphy Stores. 2. Calcule el WACC para Murphy Stores y compárelo con la suposición del 12% que la compañía ha hecho para las presentaciones de proyectos. 3. Evaluar los dos proyectos EAS y la propuesta [...]

Add to cart
Placeholder
Añadir a la lista de deseos

CASE HARVARD: MSDI. Alcalá of Henares, Spain (15)

$20.00

Compute the net present value of the photoelectric inspection equipment in: a.) pesetas, by discounting peseta cash flows at a peseta discount rate; and b.) dollars, by translating future peseta cash flows into dollars at expected future spot exchange rates. Assume that at the time of the analysis, annual inflation was expected to be 8% in Spain and [...]

Add to cart
Placeholder
Añadir a la lista de deseos

CASE HARVARD: MARRIOTT CORPORATION – THE COST OF CAPITAL FOR DIVISION (13)

$30.00

If Marriott uses a single discount rate for evaluating investments in each business line what could happen with the company long term? What is the cost of capital for divisions Marriott Hotel and restaurant? What are the risk-free rates and the risk premium to use in calculating capital cost of each division? How to calculate [...]

Add to cart
Placeholder
Añadir a la lista de deseos

CASE: CONSORTIUM MC AGUIRRE – SAN JACINTO RAIL (19)

$20.00

The McAguirre Consortium owns 100% of the shares of San Jacinto Rail. This company was created with the purpose of offering a service alternative to land transport truck at a more competitive price. The significant growth experienced nationally and globally in this sector has led this group of investors to assess the possibility of implementing [...]

Add to cart