Fin28

Finance Assignment Help 28

 
The industry of mobile phones is experiencing a period of growing competition that erodes the profit margin and that is killing many competitors. In the last five years the field has become an oligopolistic market with room for a very limited numbers of players of big dimensions.
In such an environment the companies pay attention to the risk linked to their financial structure choices and on the impact they may show on the market value of their shares.
 
Mr. Krunhan, CFO of Soundsignal Company Ltd. Is considering the situation of his firm, listed on a foreign Stock Exchange because he is interested in evaluating the firm and in carrying out a comparison to a possible peer. Currently Soundsignal Company has 100.000 shares listed on the market with a book value per share equal to 100 dollars; it issued also 100.000 bonds with a book value of 100 dollars each one.
 
The current price of a share is 500 dollars and the market value of every bond is 110 dollars.
 
a) Estimate the enterprise value of Soundsignal Company and calculate its leverage ratio (D/E).
 
b) Soundsignal Company is expected to generate free cash flows to firm constant and equal to 400,000 dollars per year without changes in Net Working capital nor in the financial structure. Under these assumptions and keeping in in mind also that the company does not have to face new investments, help Mr. Krunhan to estimate his weighted average cost of capital.
 
 

How it Works

How It works ?

Step 1:- Click on Submit your Assignment here or shown in left side corner of every page and fill the quotation form with all the details. In the comment section, please mention product code mentioned in end of every Q&A Page. You can also send us your details through our email id support@assignmentconsultancy.com with product code in the email body. Product code is essential to locate your questions so please mentioned that in your email or submit your quotes form comment section.
 
Step 2:- While filling submit your quotes form please fill all details like deadline date, expected budget, topic , your comments in addition to product code . The date is asked to provide deadline.
 
Step 3:- Once we received your assignments through submit your quotes form or email, we will review the Questions and notify our price through our email id. Kindly ensure that our email id assignmentconsultancy.help@gmail.com and support@assignmentconcultancy.com must not go into your spam folders. We request you to provide your expected budget as it will help us in negotiating with our experts.
 
Step 4:- Once you agreed with our price, kindly pay by clicking on Pay Now and please ensure that while entering your credit card details for making payment, it must be done correctly and address should be your credit card billing address. You can also request for invoice to our live chat representatives.
 
Step 5:- Once we received the payment we will notify through our email and will deliver the Q&A solution through mail as per agreed upon deadline.
 
Step 6:-You can also call us in our phone no. as given in the top of the home page or chat with our customer service representatives by clicking on chat now given in the bottom right corner.
 

Features

Features for Assignment Help

Zero Plagiarism
We believe in providing no plagiarism work to the students. All are our works are unique and we provide Free Plagiarism report too on requests.

 

Relevancy
We believe in providing perfect, relevant and 100% accurate solutions to the student as per questions asked. All our experts are perfect in providing that so as to give unique experience to the students.

 

Three Stage Quality Check
We are the only service providers boasting of providing original, relevant and accurate solutions. Our three stage quality process help students to get perfect solutions.

 

 

100% Confidential
All our works are kept as confidential as we respect the integrity and privacy of our clients.

Related Services


 

 
c) On the basis of the cost of debt resulting from the probability of default recognized to the company, that implies to add a premium of 2% to an initial reference interest rate equal to 2%, estimate the coherent return expected by the shareholders. You know that the taxation corporate rate is 30%.
 
 
Mr. Kruhnan is analyzing the industry. The well-known firm Mobile Devices Ltd. captures his attention. Mobile Devices is actually a competitor for Soundsignal.Mobile Devices in in a stationary condition too and is able to generate free cash flow equal to 4.000.000 dollars every year. These free cash flows show the same systematic risk that characterizes the money expected by Soundsignal Company.Mobile Devices is an all-equity financed firm. Its number of shares is equal to 120.000.
 
 
d) Help Mr. Krunhan to estimate the cost of equity for Mobile Devices Ltd.
 
e) Help him also in the estimation of the enterprise value and of the equity value for Mobile Devices.
 
f) Finally let’s imagine that Mobile Devices decides to issue 150.000 bonds at par for a total amount of 15 million, with the aim of buying back shares. In this case what would Mr. Krunhan conclude about the new enterprise value and the new equity value? How about the Debt/Equity Ratio?

 

Product Code :Fin28

To get answer for this question, kindly click here (Note: Don’t forget to write the product code in comment section)

You can also email us at assignmentconsultancy.help@gmail.com but please mentioned product code in the mail body while sending emails.You can browse more questions to get answer in our Q&A sections here.

Summary