1. A firm has $300 million of assets that includes $60 million of cash and 8 million shares outstanding. If the firm uses $30 million of its cash to repurchase shares, what is the new price per share?
A) $52.50
B) $45.00
C) $37.50
D) $30.00
2. A project will give a one-time cash flow of $22,000 after one year. If the project risk requires a return of 10%, what is the levered value of the firm with perfect capital markets?
A) $24,000
B) $16,000
C) $20,000
D) more information needed