Cavo corporation expects an ebit of $33,000 every year forever. the company currently has no debt, and its cost of equity is 16%. the corporate tax rate is 35%.a. what is the current value of the company? b-1. suppose the company can borrow at 10%. what will the value of the company be if it takes on debt equal to 60% of its unlevered value? b-2. suppose the company can borrow at 10%. what will the value of the company be if it takes on debt equal to 100% of its unlevered value? c-1. suppose the company can borrow at 10%. what will the value of the company be if it takes on debt equal to 60% of its levered value? c-2. suppose the company can borrow at 10%. what will the value of the company be if it takes on debt equal to 100% of its levered value?

Employees of dti, inc. worked 1,600 direct labor hours in january and 1,000 direct labor hours in february. dti expects to use 18,000 direct labor hours during the year, and expects to incur $22,500 of worker’s compensation insurance cost for the year. the cash payment for this cost will be paid in april. how much insurance premium should be allocated to products made in january and february?

Shelby company produces three products: product x, product y, and product z. data concerning the three products follow (per unit): product x product y product z selling price $ 85 $ 65 $ 75 variable expenses: direct materials 25.50 19.50 5.25 labor and overhead 25.50 29.25 47.25 total variable expenses 51.00 48.75 52.50 contribution margin $ 34.00 $ 16.25 $ 22.50 contribution margin ratio 40 % 25 % 30 % demand for the company’s products is very strong, with far more orders each month than the company can produce with the available raw materials. the same material is used in each product. the material costs $8 per pound, with a maximum of 4,400 pounds available each month. required: a. compute contribution margin per pound of materials used. (round your intermediate calculations and final answers to 2 decimal places.) contribution margin per pound product x $ product y $ product z $ b. which orders would you advise the company to accept first, those for product x, for product y, or for product z? which orders second? third? product x product y product z

Storico co. just paid a dividend of $3.15 per share. the company will increase its dividend by 20 percent next year and then reduce its dividend growth rate by 5 percentage points per year until it reaches the industry average of 5 percent dividend growth, after which the company will keep a constant growth rate forever. if the required return on the company’s stock is 12 percent, what will a share of stock sell for today?