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Author Question: Scooby Snacks Inc. is an all equity firm. At the end of the current year, the CFO expects EBIT to be ... (Read 68 times)

Yolanda

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on: Apr 25, 2021
Scooby Snacks Inc. is an all equity firm. At the end of the current year, the CFO expects EBIT to be $5M and the same earnings are expected annually in perpetuity. The company is not growing so CAPEX and investments in net working capital are zero. The cost of equity for Scooby Snacks Inc. is 14%. Scooby's prime competitor is a company called Shaggy Treats Inc. Shaggy Treats is identical to Scooby Snacks in every respect except that Shaggy Treats has $2.5M of long term debt outstanding. What is the value of Shaggy Treats' equity? The corporate tax rate is 30%.
◦ $22.5M
◦ $23.0M
◦ $23.25M
◦ $25M
◦ $25.75M
Corporate Finance Online ¦ Eakins, McNally ¦ 2nd Edition
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Marked as best answer by Yolanda on Apr 25, 2021

laurnthompson

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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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Yolanda

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Reply 2 on: Apr 25, 2021
:D TYSM

raili21

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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