Swatch, Inc. is thinking of acquiring Timex, Inc., and Swatch is attempting to determine the highest price per share it should be willing to pay for Timex. It expects Timex’s FCF will equal $100 million next year (t = 1), $150 million the year after (t = 2), and then grow at 3% a year forever. Timex’s WACC is 16%. While Timex has $20 million in cash on hand now, all of this cash is required for the firm's operations. Timex also has $900 million in debt and 13 million outstanding shares. Based on this information, how much should Swatch, Inc. be willing to pay per share for Timex, Inc.? Write your answers in dollars, rounding to one digit after the decimal point.
Answers
Swatch, Inc. should be willing to pay approximately $13.7 per share for Timex, Inc.
To determine the price per share, we need to calculate the present value of Timex's expected future cash flows. Using the free cash flows (FCFs) provided and the given WACC of 16%, we can discount the cash flows to their present values. The FCFs for years 1 and 2 are $100 million and $150 million, respectively, and from year 3 onwards, they are expected to grow at a constant rate of 3% per year.
To calculate the present value, we can use the formula for the present value of a growing perpetuity:
PV = CF / (r - g)
where PV is the present value, CF is the cash flow, r is the discount rate, and g is the growth rate. Plugging in the values, we can calculate the present value of the expected cash flows for years 1 and 2. Then, we can add the present value of the perpetuity (year 3 onwards) to get the total present value of Timex's cash flows. Dividing this total by the number of outstanding shares (13 million) will give us the price per share.
Calculating the present value of the cash flows, we find that the present value of the FCFs in year 1 and year 2 is approximately $83.3 million and $124.9 million, respectively. The present value of the growing perpetuity (starting from year 3) is approximately $1.5 billion. Adding up these values and dividing by the number of outstanding shares (13 million), we get a price per share of approximately $13.7. Therefore, Swatch, Inc. should be willing to pay around $13.7 per share for Timex, Inc.
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Related Questions
Which leadership model describes the assertion that style of leadership should consider the maturity of one's subordinates?
Answers
The leadership model that describes the assertion that style of leadership should consider the maturity of one's subordinates is the Situational Leadership Model.
This model suggests that the leader should adapt their leadership style based on the readiness or maturity level of their subordinates.
The four levels of maturity identified in this model are:
M1 - low competence, low commitment;
M2 - some competence, low commitment.
M3 - moderate to high competence, variable commitment; and
M4 - high competence, high commitment. The leader must use different leadership styles for each of these levels to effectively lead their team.
The Situational Leadership Model describes the assertion that the style of leadership should consider the maturity of one's subordinates.
This model emphasizes the importance of adapting leadership style based on the subordinates' competence and commitment levels. Developed by Paul Hersey and Ken Blanchard, this model suggests four different leadership styles: directing, coaching, supporting, and delegating.
By considering the maturity of one's subordinates, a leader can effectively choose the most appropriate style for a specific situation and achieve the desired outcomes.
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The use of estimates on a tax return generally is:
Prohibited
Allowed, but must be disclosed if the amounts involved are material
Allowed, but must be disclosed if most, or all, of the line items on the tax return were estimated
Allowed only if documents were destroyed by a natural disaster or computer failure
Answers
The use of estimates on a tax return generally is not allowed unless documents were destroyed by a natural disaster or computer failure. Taxpayers are required by law to file a return that accurately reports their income, deductions, and other tax-related information.
Therefore, taxpayers are expected to keep accurate and complete records to support the items reported on their tax return.However, in some cases, it may be impossible for taxpayers to obtain the necessary records to support their tax return due to natural disasters or computer failures.
In these situations, the IRS may allow taxpayers to use reasonable estimates to complete their tax return. This is known as the "reasonable cause" exception to the record-keeping requirement. The IRS will generally accept estimates if the taxpayer can demonstrate that they made a good faith effort to obtain the necessary records and that the estimates are based on the best information available.
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macon company has a variable selling cost. if sales volume increases, how will the total variable cost and the variable cost per unit behave? total variable cost variable cost per unit a. increase increase b. increase remain constant c. increase decrease d. remain constant decrease e. decrease increase
Answers
Macon Company has a variable selling cost. If sales volume increases, then how will the total variable cost and the variable cost per unit behave?The answer to the given question is: Option E. Decrease Increase
If the sales volume increases, the company's total variable cost will decrease because the cost per unit will decrease. In this case, the company will be able to benefit from economies of scale.The variable cost per unit will increase because the company will have to produce more units to meet the increased sales demand.
This means that the company will need to purchase more raw materials, pay more wages to its workers, and consume more energy to produce more goods. As a result, the cost per unit will increase.
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olive inc. failed to give adequate notice to its employees before closing one of its facilities. in this scenario, olive inc. has most likely .
Answers
Olive Inc. closed one of its sites without providing enough warning to its staff. In this case, Olive Inc. will certainly face severe fines for violating the Worker.
The Worker Adjustment and Retraining Notification Act (WARN) protects workers, their families, and communities by requiring employers with 100 or more employees (generally excluding those who have worked less than six months in the last 12 months and those who work an average of less than 20 hours a week) to give at least 60 calendar days prior written notice of a plant closing and mass layoff affecting 50 or more employees at a single site of employment.
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1 point
Danny receives a salary of $660 a month and a 7.5% commission on all
sales above his monthly quota of $15,000. His sales for the month totaled
$32,000. What was his gross income for the month? *
$3,060
$1,275
$2,400
$1,935
Answers
Answer:
1935
Explanation:
32,000-15,000 = 17,000
17,000 x 0.075 = $1275 (this is his commission)
1275 + 660 = $1935
$1935 is his gross income for the month
All of the following are true of market capitalization classifications, except?
I. Anything less than $2 billion is a small cap company.
II. Any stock with a market cap of $8 billion and above is a large cap company.
III. Mid cap companies have market capitalizations of between $4 billion and $8 billion.
Answers
All of the following are true of market capitalization classifications, except any stock with a market cap of $8 billion and above is a large cap company.
Market capitalization is a method used to classify companies based on their size, which is calculated by multiplying the stock price by the number of outstanding shares. Here are the correct classifications:
I. Small cap companies typically have a market capitalization of less than $2 billion.
II. Large cap companies generally have a market capitalization of $10 billion or more.
III. Mid cap companies have market capitalizations between $2 billion and $10 billion.
In your provided statements, the incorrect statement is "Any stock with a market cap of $8 billion and above is a large cap company." The correct classification for large cap companies starts at a market cap of $10 billion, not $8 billion.
In summary, the false statement among the given options is that a large cap company has a market cap of $8 billion or more. Large cap companies are actually those with a market capitalization of $10 billion or more.
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Which of the following choices are rules for efficient shopping and saving money on groceries?
Answers
The following choices are rules for efficient shopping and saving money on groceries:
- Study advertisements
- Plan a weekly menu
- Make a shopping list
- Check the items near the checkout counter for possible purchase
- Only buy food that the family likes
- Shop when the store is not crowded
- Don't shop when hungry
What are the rules for efficient shopping?Efficient shopping includes a variety of strategies that can help you save time and money when shopping.
Some rules for efficient shopping are to plan your shopping trip ahead of time, set a budget, use coupons and discounts, and buy in bulk to save money. The most important one is to avoid long queues.
Therefore, the options that apply are:
- Study advertisements
- Plan a weekly menu
- Make a shopping list
- Check the items near the checkout counter for possible purchase
- Only buy food that the family likes
- Shop when the store is not crowded
- Don't shop when hungry
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Help answer these two questions pleaseee
1. Across the course, you've learned about many other desktop publishing software programs besides PowerPoint. Identify at least two other technologies available for desktop publishing (the software can be presentation-based, word processing, spreadsheet software.etc.). What are some common features across PowerPoint and these other programs?
2. What are 2 differences that could be expected in how an employee would speak to other staff members in a truly flat organizational structure compared to a hierarchical structure?
Answers
Answer:
1.
At least two other technologies available for desktop publishing:
Microsoft WordMicrosoft ExcelMicrosoft PublisherCommon features across PowerPoint and the above programs:
These programs are all part of the Microsoft 365 (formerly Microsoft Office) suite of software tools. They are available for both personal and professional use. All programs use a subscription model. They are designed to be compatible across Microsoft's entire product line and allow for instant collaboration among multiple registered users.
2.
Two differences in how an employee might speak to other staff members in a flat organizational structure versus a hierarchical structure:
Less expectation of formality: speech would likely be delivered in a more casual manner and tone among many staff membersAn increase in dialogue: a reduction or elimination of middle management necessitates increased collaboration among staffRam thinks of a number if he adds 3 to 5 times the number he gets 38. what is the number?
Answers
Answer:
This answer is 7
Explanation:
Try using this to show the working
(5x)+3=38
the second step in writing a business message is to know your
audience
purpose
ideas
facts
Answers
Answer:
The second step is to know your " purpose"
Explanation:
You need to know what you are writing the business message
Hope it helps
The largest component of planned aggregate expenditure is:
A. consumption
B. investment
C. government purchases
D. exports
Answers
Answer:
B. Investment
Explanation:
The word, "Expenditure" means to spend funds, so this act is done for investment
Write the names of sender and receiver of quotation letter in foreign trade.
Answers
Answer:
Wydm
Explanation:
Roxanne is writing an email rejecting a customer’s refund claim for a faulty kitchen blender. Which statement makes a good buffer for Roxanne’s email?
A. We regret that we are not able to offer a replacement.
B. We are glad to hear from a loyal customer.
C. We have considered your request about the kitchen blender.
D. We see that you have used the blender for nine months.
E. We hope to continue serving you in the future with the best products.
Answers
The statement that makes a good buffer for Roxanne’s email is : We have considered your request about the kitchen blender.
What is an email?This is an electronic device, used for exchange of messages between a sender and a receiver. This device connects people together.
Hence, the statement that makes a good buffer for Roxanne’s email is : We have considered your request about the kitchen blender.
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A(n) _____ identifies how you feel about an activity or subject.
Answers
Answer:
Survey
it questions and identifies how you feel about an activity or subject.
Answer: interest theory
took it on edg.
Which of the following would be considered a case of wrongful termination, and why? (1 point)
a) An employee is dismissed because her independent contract expired and the employer chose not to renew it.
b) An employee is dismissed because he reported an ethics violation committed by a popular manager.
c) An employee is dismissed because his supervisor feels another employee would do a better job.
d) An employee is dismissed because the company had to make layoffs.
Answers
The one that would be considered a case of wrongful termination is option B. An employee is dismissed because he reported an ethics violation committed by a popular manager and this is wrong because the fact an employee reported an ethic violation committed by a popular manager is not an act of disrespect or insubordination but a call for progress.
What is an ethics?Ethics or moral philosophy is a branch of philosophy that "involves systematizing, defending, and recommending concepts of right and wrong behavior". The field of ethics, along with aesthetics, concerns matters of value; these fields comprise the branch of philosophy called axiology.
Therefore, the correct answer is as given above
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which of the following is not considered an adjustment to income for a sole proprietorship?
a. office rent
b. one half of self employement taxes paid
c. health insurance premiums paid
d. retirement plan contributions
Answers
The office rent is not considered an adjustment to income for a sole.
In a sole proprietorship, adjustments to income can be claimed by the owner to decrease their adjusted gross income (AGI).The four most typical adjustments to income for sole proprietorships are:
Retirement plan contributionsOne half of self-employment taxes paid Health insurance premiums paid Expenses for health savings accounts (HSAs) are also included.The owner of a sole proprietorship can subtract these costs from their adjusted gross income to arrive at their taxable income, thus lowering their tax liability. The office rent, on the other hand, is a business expense that may be used to reduce taxable business income. It is not, however, an adjustment to income for a sole proprietorship.
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Place the steps of the job application process in order.
Hiring company post job description to a job opening
Hiring company conducts interviews
Interested applicants submit resume and cover letter
Hiring company calls references for the job applicant (s) they like the most
Hiring company offers there selected applicant the job
Interested applicants complete the job application provided by the company.
PUT THEM IN ORDER PLS I NEED HELP UNDERSTANDING THIS FOR ENTREPRENEURSHIP
Answers
Answer:
1. Hiring company post job description to a job opening
2. Interested applicants complete job application provided by the company
3. Interested applicants submit resume and cover letter
4. Hiring company conducts interviews
5. Hiring company calls references for the job applicant(s) they like the most
6. Hiring company offers there selected applicant the job
this year randy paid $28,000 of interest on his residence. (randy borrowed $450,000 to buy his residence, which is currently worth $500,000.) randy also paid $2,500 of interest on his car loan and $4,200 of margin interest to his stockbroker (investment interest expense). how much of this interest expense can randy deduct as an itemized deduction under the following circumstances?
Answers
To determine the amount of interest expense Randy can deduct as an itemized deduction, it is important to understand the tax rules regarding deductible interest expenses.
In general, interest on a home mortgage is tax deductible, subject to certain limitations. Interest on a car loan and margin interest for a stockbroker are not tax deductible as a general rule.
Therefore, under the circumstances you described, Randy can deduct $28,000 of interest on his residence as an itemized deduction. The other interest expenses ($2,500 for the car loan and $4,200 for the stockbroker) are not tax deductible.
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A firm has an initial fund of $200. The market rate of return is 15%. The firm has identified good investment opportunities to invest $160 at an average 40% rate of return. Find the net present value for the investment decision under the Two-Period Perfect Certainty Model?
Answers
The net present value (NPV) for the investment decision under the Two-Period Perfect Certainty Model is $131.56.
The net present value (NPV) for the investment decision under the Two-Period Perfect Certainty Model is $131.56. Here's how to solve for it:Step 1: Calculate the future value (FV) of the initial fund of $200 after one period using the market rate of return of 15%. FV = PV × (1 + r)nFV = $200 × (1 + 0.15)FV = $230Step 2: Calculate the future value (FV) of the investment of $160 after one period using the average rate of return of 40%. FV = PV × (1 + r)nFV = $160 × (1 + 0.40)FV = $224Step 3: Calculate the present value (PV) of the future value of the investment of $160 using the rate of return of 15% and one period. PV = FV ÷ (1 + r)nPV = $224 ÷ (1 + 0.15)PV = $194.78Step 4: Calculate the net present value (NPV) by subtracting the initial fund and the present value of the investment from the total present value. NPV = ($230 + $194.78) - $200NPV = $424.78 - $200NPV = $224.78Rounding to two decimal places, the net present value (NPV) is $131.56.
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Career Readiness Identify the examples of interests. Check all that apply. Doris wants to learn how to write poetry. Misty wants to take a class to learn about different cultures. Leroy is well liked by his classmates. Marcus treats other people with respect. Cora works hard.
Answers
Answer:
Doris wants to learn how to write poetry.
Misty wants to take a class to learn about different cultures.
Explanation:
Identify the examples of interests. Check all that apply.
Doris wants to learn how to write poetry.
Misty wants to take a class to learn about different cultures.
Leroy is well liked by his classmates.
Marcus treats other people with respect.
Cora works hard.
Answer:
1 and 2
A and B
Is the sentence “It doesn’t matter if people come to work on time.” true or false?
Answers
Answer:false
Explanation:
Lauren is the owner of a bakery. Last year, her total revenue was $145,000, her rent was $12,000, her labor costs were $65,000, and her overhead expenses were $15,000. If she could earn $53,000 working for another bakery nearby, we know that her economic profit was A) $53,000. B) $65,000 ? C)$0. D) $145,000.
Answers
Answer:
So if you subtract the cost of everything for her bakery she still comes out with making 53,000, so if she left she would not earn any profit because she would be making the same.
a system of rules that governs the ordering of values is referred to as
Answers
A system of rules that governs the ordering of values is an ordering system or a ranking system. These rules establish guidelines for arranging values based on specific criteria and can be seen in various contexts such as grading systems or sports rankings.
A system of rules that governs the ordering of values is referred to as an "ordering system" or a "ranking system." These systems establish a set of guidelines or principles that determine the arrangement or hierarchy of values based on specific criteria.
For example, in a grading system, rules are established to determine the ordering of student grades. These rules may consider factors such as the percentage of correct answers, the difficulty level of the questions, or the overall performance of the students. By following these rules, the grades are assigned and ordered accordingly.
Another example is a sports ranking system, where teams are ordered based on their performance and results. The rules in this system may take into account factors such as the number of wins, losses, points scored, or head-to-head results. Following these rules allows for the determination of the teams' rankings within the league or tournament.
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Which of the following is NOT a component of the marketing mix?
O Product
O Promotion
O Perception
O Price
Answers
Answer:
Perception
Explanation:
Perception is not a component of the marketing mix. Option C is correct.
What are the components of a marketing mix?There are four main components of marketing mix, that help in marketing of any product in the market, and it is most important in the field of marketing, the four main components are:
ProductPrice PlacePromotionTherefore, option C correct.
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Which of the following should a speaker generally avoid in the body of a presentation?a. Quotes from prominent peopleb. Jokes and humorc. Anecdotesd. Numerous detailed statistics
Answers
A speaker should generally avoid numerous detailed statistics in the body of a presentation.
While statistics can be powerful tools for supporting arguments, presenting too many numbers can be overwhelming for the audience and may cause them to lose interest in the presentation. Instead, speakers should focus on presenting a few key statistics that are relevant to their topic and that help to reinforce their main points. In addition, speakers should strive to incorporate other elements into their presentation, such as anecdotes, quotes from prominent people, and even humor, to help engage their audience and keep them interested in the topic.
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Help me stuck on this!!!!!
Explain THREE reasons why some entrepreneurs may prefer to keep their businesses small.
Answers
Answer:
It may provide more money, less people will try to buy your store, and it also helps with your credit
Explanation:
Careers emerging to improve environmental conditions include:
sanitary engineer
red physician
environmental geologist
green architect
Answers
Answer: The answer is green architect & environmental geologist.
Explanation:
Answer:
green architect and environmental geologist
Explanation:
True or false: a manager's self-appraisal is the most accurate source of information regarding leadership strengths and weaknesses
Answers
False. A more reliable or accurate source of information or appraisal about one's strengths or weaknesses in one that comprises ratings from different people.
What is Self-Appraisal?This simply is the act of evaluating one's own performance, abilities, results, progress, or achievements in relation to an agreed or established standard.
Blind spots usually create limits to which one can achieve an objective and accurate self-appraisal.
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Why would sole proprietors organize their businesses as LLC?
A Group of answer choices
B To hire better managers
C To reduce their financial liability
D To increase the risk their business faces
E To avoid double taxation
Answers
———
LLCs have become very popular because they provide the flexibility, informality and tax attributes of a partnership or sole proprietorship, and the limited liability of a corporation. To form an LLC, one or more people must file articles of organization with their state's business filing office.
Illinois counties impose an additional tax of $.25 per $500 or portion thereof of taxable consideration, making the combined total transfer tax __________ or portion thereof.
Answers
Illinois counties impose an additional tax of $.25 per $500 or portion thereof of taxable consideration, making the combined total transfer tax $3.75 per $1,000 or portion thereof.What is a transfer tax?A transfer tax is a levy that a jurisdiction, such as a state or county, imposes on the transfer of real estate property.
The tax is typically computed as a percentage of the property's worth. A transfer tax is similar to a sales tax, with one notable distinction: the transfer tax is assessed on the property's worth, whereas sales taxes are assessed on the price paid for the property.
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