On its outstanding, perpetual debt, Lobbyists United pays interest of $330000.0 per annum ata rate of 6.0%. The firm pays also corporate tax at a marginal rate of 28.0%. Aside from the presence of corporate taxes, assume that Lobbyists United exists in a world where there are no other capital market imperfections (such as agency costs, the costs of financial distress, etc.). PART A: Calculate the present value of the interest tax shield???Million. (Round to 2 decimal places.) Assume that Lobbyists United also has 180, 000 shares of ordinary equity outstanding that currently trade at a price of $45.37 each. PART B: Given the above information, what would be the percentage weight of debt (i.e. wD) in their capital structure that the firm would use in the calculation of their weighted average cost of capital (i.e. WACC)???%.(Round to 2 decimal places.)

Harry lnc pays an annual interest expense of $442000.0 at a rate of 6.8% on its outstanding perpetual debt. Harry lnc pays corporate tax at a marginal rate of 27.0%. Aside from the presence of corporate taxes, assume that Harry lnc exists in a world where there are no other capital market imperfections (such as agency costs, the costs of financial distress, etc.). PART A: Calculate the present value of the interest tax shield. $???million. (Round to 2 decimal places. Assume that Harry lnc also has 280, 000 shares of ordinary equity outstanding that currently trade at a price of $54.4 each. PART B: Given the above information, what would be the percentage weight of equity (i.e. We) in their capital structure that the firm would use in the calculation of their weighted average cost of capital (i.e. WACC)???%.(Round to 2 decimal places.)

Companies U and L are identical in every respect except that U is unlevered while L has $10 million of 5.9% bonds outstanding. Assume that (1) all of the MM assumptions are met, (2) both companies are subject to a 34% federal-plus-state corporate tax, (3) EBIT is $2 million, and (4) the cost of equity to Company U is 9%. What is the value, in millions, of Company L under the MM model?

Toothy Ltd earns a pre tax amount of $8.8 million per year. Their unlevered cost of capital is 8.7%. Toothy also has $62 million in debt. The tax rate is 30.%. a.What is the valuation of Toothy Ltd if it was only funded by equity capital?b.What is the interest tax shield if the debt incurs an interest rate of 9% per annum?

Suppose that UK Motors Ltd. is considering an investment of £30 million to develop a newfactory. Assume that the company’s stockholders require a 22% rate of return, that thecompany’s bondholders require a 9% rate of return, that the UK corporate tax rate is 40%,that 35% of the project will be financed by debt, and that 65% of the project will be financedwith equity. What must be the annual income from the project if it is to be a zero net presentvalue investment?

1 January Shares in issue 1,000,000Profit for the year ended 31 December $200,00031 March Company issues $200,000 6% convertible bonds Terms of conversion:100 shares/$100 if within five years110 shares/$100 if after five yearsAn equivalent loan without the conversion rights would have required an interest rate of 8%.The company’s tax rate is 33%Basic EPS: $200,000/1,000,000 = $0.20Required:Calculate diluted EPS