Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. how much potential value, if any, can ahp create a

How much potential value, if any, can AHP create at each of the proposed levels...

50.1K

Verified Solution

Question

Finance

How much potential value, if any, can AHP create at each of the proposed levels of debt shown in Exhibit 3?

image

Pro Forma 1981 for Actual 30% Debt to 50% Debt to 1981 Total Capita Total Capita 70% Debt to Capital Sales $4,131.2 $4,131.2 $4,131.2 $4,131.2 Earnings before interest and taxesa Interest Profit before taxes Taxes Profit after tax Dividends on 954.8 2.3 952.5 455.2 497.3 922.2 52.7 869.5 417.4 452.1 922.2 87.8 834.4 400.5 433.9 922.2 122.9 799.3 383.7 415.6 preferred stock Earnings available 4 496.9 4 451.7 4 433.5 4 415.2 to common shareholders Dividends on common stock Average common $295.3 $271.0 $260.1 $249.1 127.3 118.9 shares outstanding (millions) Earnings per share Dividends per share 155.5 135.7 $3.18 $1.90 $3.33 $2.00 $3.41 $2.04 $3.49 $2.10 Beginning of Year Beginning of Year after Recapitalization $360.3 376.1 $877.6 $360.3 626.8 $626.9 $360.3 877.6 $376.1 $593.3 Cash and equivalents Total debt Net worth Common stock price Aggregate market 13.9 $1,472.8 S30 value of common stock $4,665.0 a EBIT is reduced in pro forma results due to the loss of interest income from the $233 million in excess cash used to repurchase stock

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Finance
1.2K views

e. What is an annuity? due? How does this differ from an ordinary? annuity?

Psychology
1.2K views

Compare and contrast the concerns and outlook of the second great awakening, the social reform, and...

Biology
1.2K views

in guinea pigs the allele for black cost color B is dominant over white coat...

Biology
1.2K views

Question Should euthanasia for the terminally ill be legalized Why or why not Issues to...

Geometry
1.2K views

7 Find the length of the missing side of the right triangle below If necessary...

Algebra
1.2K views

All solutions [x, y, z] of the linear equation9x - 25y + 24z = -20geometrically...

Algebra
1.2K views

Answer A 4 2 2 2 10 6 Selecting a checkbox will replace the entered...

Algebra
1.2K views

Solve each of the following equations a 3x 2 81 b 8 105

Algebra
1.2K views

5 through 5 4 perp to y x A y 4 x 5 B y...

Accounting
1.2K views

Exercise 121 (Algo) Securities held-to-maturity; bond investment; effective interest, discount; financial statement effects [LO12-1, 12-2]...

Accounting
1.2K views

Ontario Skateboard Company has the following inventory and purchases during the fiscal year ended December...

Finance
1.2K views

stion 5 You want to endow a scholarship that will pay $10,000 per year forever,...