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Author Question: Analysts expect M&M Inc. to generate EBIT of $100,000 at the end of the current year. Earnings are ... (Read 52 times)

jrubin

  • Hero Member
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  • Posts: 552
on: Apr 25, 2021

Question 1

According to Modigliani and Miller's second paper, firms should use ________% debt to maximize the value of the firm.
◦ 100
◦ 20
◦ 40
◦ 80
◦ 60

Question 2

Analysts expect M&M Inc. to generate EBIT of $100,000 at the end of the current year. Earnings are expected to remain constant in perpetuity. M&M has $100,000 of perpetual bonds outstanding with a yield (and coupon) of 10%. M&M has 100,000 shares outstanding which trade for $4.4. The tax rate is 40%. What is the WACC for M&M Inc.?
◦ 10.00%
◦ 11.11%
◦ 11.75%
◦ 12.00%
◦ 12.27%
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Marked as best answer by jrubin on Apr 25, 2021

frre432

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Reply #1 on: Apr 25, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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jrubin

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Reply 2 on: Apr 25, 2021
YES! Correct, THANKS for helping me on my review

Sarahjh

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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