CashCow Inc is all equity financed and generates perpetual annual EBIT of $100. Assume that the EBIT, and all other cash flows, occur at year end and that we are currently at the beginning of a year
CashCow has 150 shares outstanding and shareholders require a return of 10%. CashCow hires a new CEO, a Mr. Cowslowski, who spends 10% of EBIT on parties, houses and yachts. Assume that this spending is expected to continue in perpetuity. What price will the shares trade at after Mr. Cowslowski is hired? The tax rate is 40%.
A) $3.20
B) $3.40
C) $3.60
D) $3.80
E) $4.00
C
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Raul, a salesperson for the Lovely Landscapes landscaping company, is working with a longtime customer who is interested in either cutting back on the services or getting a better price due to the tight economy. Raul tells his manager, "I want to take care of the customer with the best value. So what do you think is the best package to offer in this situation?" Raul and his manager are trying to utilize the
A. contingency design. B. streamlined design. C. focused spending approach. D. boundaryless approach. E. mechanistic design.
As a promotion technique, samples are often used for new products when ________ will influence the diffusion of the product.
A. relative advantage B. observability C. complexity D. compatibility E. trialability
The __________ is the disclosure document that an issuer of securities provides to each prospective purchaser under the 1933 Act
a. registration statement b. prospectus c. investment contract d. placement memorandum
Full-time workers who are illicit drug users are more likely than non-drug users to have done all of the following except:
A. Voluntarily left an employer or been terminated within the last year B. Taken unexcused absences from work C. Had past military service D. Worked for three or more employers in the past year