Need help with a Question on Finance

Elliott Enterprises (EE) is an all-equity firm, which pays out 100% of earnings to its shareholders. As an established firm, its earnings and obligations are considered perpetual. In the upcoming calendar year, EBIT is projected to be $7,000,000. Tax rate is 32%.

A). If the cost of equity capital is 9% and there are 500,000 shareholders calculate the price per share of EE stock.

B). 20,000 bonds with 6% coupon will be sold to raise funds to repurchase equity. What will be the new value of EE?

C).Recalculate the cost of equity capital of EE.

 

Do you need a similar assignment done for you from scratch? We have qualified writers to help you. We assure you an A+ quality paper that is free from plagiarism. Order now for an Amazing Discount!
Use Discount Code "Newclient" for a 15% Discount!

NB: We do not resell papers. Upon ordering, we do an original paper exclusively for you.