All supply and demand quantities in an assignment model equal one unit
Indicate whether the statement is true or false
TRUE
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Cash flow per share is computed by dividing cash on the balance sheet by the number of shares outstanding
a. True b. False Indicate whether the statement is true or false
Jon the Bartender couldn’t get through to management about some of the service issues he was facing, so one morning before the restaurant opened he brought in a bunch of his acting friends to show management some of the problems he has noticed in the service delivery system. This exhibition is a type of ______.
a. leadership opportunity b. positive reinforcement c. simulation d. training
Only niche companies will end up using a single distribution network
Indicate whether the statement is true or false.
Pensacola Soda Inc is all equity financed and generates perpetual annual EBIT of $300. Assume that the EBIT, and all other cash flows, occur at year end and that we are currently at the beginning of a year
Assume that Pensacola has a 100% payout rate, 1,500 shares outstanding, and that shareholders require a return of 5%. Assume that the tax rate is 0%. Pensacola is considering an open market stock repurchase. It plans to buy 20% of its outstanding shares at the price of $4.00 per share. The repurchased shares will be cancelled. It will finance the repurchase by issuing perpetual bonds worth a total sum of $1,200 and a coupon rate (and yield) of 3%. Assume that the tax rate is 0%. If Pensacola goes ahead with the repurchase, then what is its WACC after the repurchase is complete? A) 3.0% B) 3.5% C) 4.5% D) 5.0% E) 5.5%