Orange Inc, a cell-phone manufacturer, is an all equity firm. At the end of the current year, the CFO expects EBIT to be $100 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 Orange is 10%. Orange's prime competitor is Verge Inc, manufacturer of the Blueberry smartphone. Verge is identical to Orange Inc in every respect except that Verge has $130.44 of long term debt outstanding. What is the value of Verge Inc? The corporate tax rate is 40%.
A) $500
B) $600
C) $630
D) $652
E) $1,000
D
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The Statutes at Large:
a. are a topical organization of statutory law. b. are a chronological organization of statutory law. c. is another name for code. d. are easily used by legal researchers. e. Both b and c
Bubbly Bottling Company is engaged in the soft-drink bottling and distribution industry in the states of New York and New Jersey. The firm currently has about 40 percent of the market for these products and related services. Carbonate Distribution
Corporation competes with Bubbly in the same states. Carbonate has about 35 percent of the market. If Bubbly were to acquire the stock and assets of Carbonate, would Bubbly be in violation of any of the antitrust laws? If so, which one? Discuss fully.
Under the Sarbanes-Oxley Act, accountants need not retain working papers relating to an audit or review
Indicate whether the statement is true or false
The following data relate to Santa Mia, Inc., a new company:Planned and actual production200,000 unitsSales at $48 per unit170,000 unitsManufacturing costs:? Variable$18 per unit Fixed$840,000Selling and administrative costs:? Variable$7 per unit Fixed$925,000There were no variances during the period.Required: A. Determine the number of units in the ending finished-goods inventory.B. Calculate the cost of the ending finished-goods inventory under (1) variable costing and (2) absorption costing.C. Determine the company's variable-costing income.D. Determine the company's absorption-costing income.
What will be an ideal response?