Tuesday
August 4, 2015

Homework Help: finance

Posted by littlebit on Saturday, May 29, 2010 at 7:39pm.

One yaer fom now, how much value creation is expected from the expansion? How much value is expected for stockholders? Bondholders?

"Economic
Growth " Probability W/O Expansion "With
Expansion " "Total Without
Expansion " "Total With
Expansion "
Low 0.3 $30,000,000 $33,000,000 $9,000,000 $9,900,000
Normal 0.5 35,000,000 46,000,000 17,500,000 23,000,000
High 0.2 51,000,000 64,000,000 10,200,000 12,800,000

Based on the averages determined it would appear that the stockholders would be better off
with the expansion. Reasoning being is that they stand to gain more revenue.

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