Biology homework help
Biology homework help. 1Which of the following best describes a best efforts underwriting commitment?Underwriter commits to selling as much of the issue as possible at the agreed-on offering price but can return any unsold shares to the issuer without financial responsibility.Underwriter is only responsible for half (50%) of the issue. The underwriter agrees to buy the entire issue and assume full financial responsibility for any unsold shares.If the entire issue cannot be sold at the offering price, the deal is called off and the issuing company receives nothing.2Free Cash Flow100Growth rate2%Tax Rate1%Cost of Capital5%Debt-to-total value50%Given the data in the above table, what is the terminal value of the business (using the growing perpetuity formula)?36003000336634003Cash100,000Debt60,000Tax Rate10%Discount Rate6%Enterprise Value500,000Perpetual Growth Rate4%Given the data in the above table, calculate market capitalization of this hypothetical company. $400,000$540,000$460,000$100,0004Cost of Equity5%Cost of debt7%Debt-to-equity ratio1.5Given the data in the above table, what is the weighted average cost of capital of this company?4.0%6.2%5.9%3.7%5Which of the following companies has the lowest degree of leverage?20% Debt, 80% Equity90% Debt, 10% Equity50% Debt, 50% Equity30% Debt, 70% Equity6Which of the following statements is correct?Financial buyers are operating partners that try to create synergies.Financial buyers are institutions that provide capital and are not operators.Strategic buyers are institutions that provide capital and are not operators.Strategic buyers are asset managers that are trying to time the purchase or sale of a business.7Which of the following is the correct ordering of the capital stack (from most secure to least secure)?Senior debt -> Equity -> Subordinated debtSenior debt -> Subordinated debt-> EquitySubordinated debt -> Senior debt -> EquityEquity -> Subordinated debt -> Senior debt8Which of the following debt repayment profiles involves a growing principal amount over time?Pay in kind debtSenior DebtMezzanine financeEquity9Which of the following statements about capital structure are correct? Select ALL correct answers.A company should always finance its business using as much debt as possible in order to optimize the capital structure.Having too little debt may increase the risk of default in repayment.Having too much equity may dilute earnings and the value of the original investors.A company needs to consider the current economic climate when making decisions on debt and equity proportions.10Which of the following is NOT a form of subordinated debt?Payment-In-Kind NotesHigh yield bondsRevolverVendor Notes11Which of the following best describes a leveraged buyout funds acquisitions?Investing in foreign businessesInvesting in mid-sized businessesInvesting in mature businessesInvesting in early stage businesses12Which of the following are examples of institutional investors? Select ALL correct answers.High net worth individualsPrivate equity firmsMutual fundsCompanies that are publicly traded on stock exchanges13Which of the following is not a function of public accounting firms?AuditFinancial Planning & AnalysisDue dilligenceTransaction Advisory14Which of the following M&A transaction equations is correct?Value created = Stand-alone value + Net synergies Consideration (price paid)Value created = Hard synergies + Soft synergies Transaction costsValue created = Stand-alone value + Net synergies Transaction costsValue created = Consideration (price paid) + Net synergies Transaction costs15What should a company do if it wants to reduce the number of shares outstanding?Issue more debtInvest in more projectsPay cash dividendsRepurchase shares
