Ballyhoo Inc., was taken private through an LBO transaction many years ago. The company is now carrying a considerable amount of debt in the form of a zero-coupon bond with a face value of $2.5B which needs to be repaid in two years. The estimated market value of the Ballyhoo underlying business is $2.0B, and the volatility of the underlying business is 30.0%. Using a risk-free rate of 1.5%: 1. What is the equity worth in this business?
2. What if the value of the debt?
3. What is the debt-to-equity ratio of the firm?
4. What is the yield to maturity of the debt?

San ruiz interiors provides design services to residential and commercial clients. the residential services produce a contribution margin of $450,000 and have traceable fixed operating costs of $480,000. management is studying whether to drop the residential operation. if closed, the fixed operating costs will fall by $370,000 and san ruiz’ income will

Awidower devised his fee simple interest in his residence as follows: “to my daughter for life, then to my oldest grandchild who survives her.” at the time of the widower’s death, he was survived by his only two children, a son and a daughter, and by one grandchild, his daughter’s son. a short time later, the daughter together with her son entered into a contract to sell the residence in fee simple to a buyer. the applicable jurisdiction continues to follow the common law rule against perpetuities, but has abrogated the rule in shelley’s case. at the closing, the buyer refused to purchase the residence. can the sellers compel the buyer to do so?

Suppose the number of equipment sales and service contracts that a store sold during the last six (6) months for treadmills and exercise bikes was as follows: treadmill exercise bike total sold 185 123 service contracts 67 55 the store can only sell a service contract on a new piece of equipment. of the 185 treadmills sold, 67 included a service contract and 118 did not.