Business, 25.04.2020 00:38 neash19

Economists at The Wells Corporation estimate that a good business environment and a bad business environment are equally likely for the coming year. The managers of Wells must choose between two mutually exclusive projects. Assume that the project Wells chooses will be the firm’s only activity and that the firm will close one year from today. Wells is obligated to make a $4,500 payment to bondholders at the end of the year. The projects have the same systematic risk, but different volatilities. Consider the following information pertaining to the two projects: Economy Probability Low Volatility Payoff High Volatility Payoff Bad 0.5 4290 3892 Good 0.5 5471 5962 What is the expected value of the firm if the low volatility project is undertaken? (Round answer to 0 decimal places. Do not round intermediate calculations) What is the expected value of the firm if the high volatility project is undertaken? (Round answer to 0 decimal places. Do not round intermediate calculations) What is the expected value of the firm’s equity if the low volatility project is undertaken? (Round answer to 0 decimal places. Do not round intermediate calculations) What is the expected value of the firm’s equity if the high volatility project is undertaken? (Round answer to 0 decimal places. Do not round intermediate calculations)

Answers: 2

Show answers

Other questions on the subject: Business

Business, 21.06.2019 23:10, SmokeyRN

Kando company incurs a $9 per unit cost for product a, which it currently manufactures and sells for $13.50 per unit. instead of manufacturing and selling this product, the company can purchase product b for $5 per unit and sell it for $12 per unit. if it does so, unit sales would remain unchanged and $5 of the $9 per unit costs assigned to product a would be eliminated. 1. prepare incremental cost analysis. should the company continue to manufacture product a or purchase product b for resale? (round your answers to 2 decimal places.)

Answers: 1

continue

Business, 22.06.2019 14:10, miacervenka

When paul o’neill joined alcoa as ceo, he set a , that there would be zero workplace accidents. a lot of people in the organization thought this was impossible given how dangerous some aluminum-manufacturing jobs are, but alcoa’s safety record improved tremendously. as the board of governors of the american red cross considers planning, one option is to make strategic plans and then direct managers to align tactical and operational plans accordingly. another option is to have planning specialists managers across the organization make their own plans. why might this organization’s executives opt for the latter approach? check all that apply. (a) the environment is a dynamic one, and department and frontline managers can come up with more responsive plans than can central leadership. (b)resources will be better coordinated across the organization in support of the overall strategy.(c) senior leadership will have more control over the organization’s direction. (d)when managers come up with their own plans, they are likely to be more committed to following through on them.

Answers: 2

continue

Business, 22.06.2019 16:50, bri663

Coop inc. owns 40% of chicken inc., both coop and chicken are corporations. chicken pays coop a dividend of $10,000 in the current year. chicken also reports financial accounting earnings of $20,000 for that year. assume coop follows the general rule of accounting for investment in chicken. what is the amount and nature of the book-tax difference to coop associated with the dividend distribution (ignoring the dividends received deduction)?

Answers: 2

continue

Business, 22.06.2019 19:10, crzyemo865

Calculating and interpreting eps information wells fargo reports the following information in its 2015 form 10-k. in millions 2015 2014 wells fargo net income $24,005 $24,168 preferred stock dividends $1,535 $1,347 common stock dividends $7,400 $6,908 average common shares outstanding 5,136.5 5,237.2 diluted average common shares outstanding 5,209.8 5,324.4 determine wells fargo's basic eps for fiscal 2015 and for fiscal 2014. round answers to two decimal places.

Answers: 3

continue

You know the right answer?

Economists at The Wells Corporation estimate that a good business environment and a bad business env...