# Finance Assignment | Professional Writing

Consider two firms, Levered Firm, and All-Equity Firm, that have identical assets. They generate identical cash flows. All-Equity Firm is a 100% finance by firm’s equity, while Levered Firm 1 million shares outstanding that trade for a price of RM19.20 per share and 1,600,000 shares outstanding and RM9,600,000 in debt at an interest rate of 4%.

Save Time On Research and Writing
Hire a Pro to Write You a 100% Plagiarism-Free Paper.

(a) According to MM Proposition 1, determine the stock price for Levered Firm.

(b) Assume that MM’s perfect capital market conditions are met and that you can borrow and lend at the same 4% rate as Levered Firm. You have RM4000 of your own money to invest and you plan on buying All-Equity Firm stock.
(i) Using homemade leverage, calculate and explain how much do you need to borrow in your margin account so that the payoff of your margined purchase of All-Equity Firm stock will be the same as an RM4000 investment in Levered Firm stock and compute the number of shares of All-Equity Firm stock you should purchase.

(ii) Using homemade (un)leverage, estimate and explain how much do you need to invest at the risk-free rate so that the payoff of your account will be the same as an RM4000 investment in All-Equity Firm stock.

Save Time On Research and Writing
Hire a Pro to Write You a 100% Plagiarism-Free Paper.

(c) Assume that MM’s perfect capital market conditions are met and that you can borrow and lend at the same 4% rate as Levered Firm. You have RM4000 of your own money to invest and you plan on buying Levered Firm stock. Using homemade (un)leverage you invest enough at the risk-free rate so that the payoff of your account will be the same as an RM4000 investment in All-Equity Firm stock. Estimate and explain the number of shares of Levered Firm stock you should purchase.

Get Finance homework today

Calculate the price
Pages (550 words)
\$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Homework Writing Services
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Other
Check the APA cover page sample on this student paper https://owl.purdue.edu/owl/research_and_citation/apa_style/apa_formatting_and_style_guide/apa_sample_paper.html
Customer 462457, March 29th, 2022
Computer science
Excellent report.
Customer 462881, April 21st, 2022
History
The work was of amazing quality and was even better than I could have imagined.
Customer 454439, June 1st, 2020
Political science
Good comparison.
Customer 457487, April 17th, 2022
SEO
thanks
Customer 463647, December 1st, 2022
Military
Excellent.
Customer 456821, June 12th, 2022
Military
good job
Customer 456821, June 11th, 2022
Communications
best writer and customer service. Thanks Tony!
Customer 462787, August 30th, 2022
Technology
I want to say, "Thank you so much!" to the writer that completed the revision to my specifications. Although there are slight changes that need to be made, I am satisfied with the final product.
Customer 452455, January 19th, 2023
Excellent.
Customer 462995, June 9th, 2022
SEO
A job well done
Customer 463679, April 28th, 2023
Healthcare & Medical
Excellent work!
Customer 463337, November 18th, 2022
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend