Pompeii Pizza Club owns three identical restaurants popular for their specialty pizzas. Each restaurant has a debt-equity ratio of 30 percent and makes interest payments of $43,000 at the end of each year. The cost of the firm's levered equity is 16 percent. Each store estimates that annual sales will be $1.29 million; annual cost of goods sold will be $750,000; and annual general and administrative costs will be $410,000. These cash flows are expected to remain the same forever. The corporate tax rate is 21 percent.
Use the flow to equity approach to determine the value of the company's equity.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Pompeii Pizza Club owns three identical restaurants popular for their specialty pizzas. Each restaurant has a debt-equity ratio of 30 ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Assume that in a private, closed economy consumption is $240 billion and investment is $50 billion, both at the $280 billion level of domestic output. Thus: A. saving is $10 billion. B. unplanned decreases in inventories of $10 billion will occur. C.
Answers (1)
When you agree to buy a car based on the great deal you're offered, and it turns out that all the best features cost extra, you have just experienced what sales technique?
Answers (1)
From the ledger balances below, prepare a trial balance for Cullumber Company at June 30, 2017. All account balances are normal.
Answers (1)
HG Livery Supply had a beginning accounts payable balance of $57,300 and an ending accounts payable balance of $55,100. Sales for the period were $610,000 and costs of goods sold were $458,000. What is the payables turnover rate
Answers (1)
Bella's Beauties sells vacuums and shampooers. The vacuums have a unit selling price of $60 and unit variable costs of $20. The shampooers have a unit selling price of $100 and unit variable costs of $60. The fixed costs for the store are $80,000.
Answers (1)
New Questions in Business
Clusters of marketable groups of customers with similar likes, dislikes, lifestyles, and purchase behaviors can be identified by multivariable segmentation systems that merge and analyze geographic, demographic, lifestyle, and behavioral data.
Answers (1)
Winter Wonder Inc. is a leader in producing winter sports equipment, including skis and skates. Recently, the firm decided to expand into the bobsled market and acquired Sleds by Bob Inc. This company produced bobsleds, but its sales had slowed.
Answers (1)
If patricia were to paint her living room alone, it would take 4 hours. her sister naomi could do the job in 5 hours. how long would it take them working together? if needed, submit your answer as a fraction reduced to lowest terms.
Answers (1)
2. Suppose you currently have $3,000 and plan to purchase a 3-year certificate of deposit (CD) that pays 2% interest compounded annually. How much will you have when the CD matures
Answers (1)
From police records, it has been determined that 15% of drivers stopped for routine license checks are not wearing seat belts. if a police officer stops 10 vehicles, how likely is it that two consecutive drivers won't be wearing their seat belts?
Answers (1)