Lamont Corp

question 76

Multiple Choice

Lamont Corp.uses no debt.The weighted average cost of capital is 11 percent.The current market value of the equity is $38 million and there are no taxes.What is EBIT?

• A)$3,423,000
• B)$3,508,600
• C)$3,781,100
• D)$3,898,700
• E)$4,180,000

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Definitions:

Cash Flow

A measurement of the net amount of cash and cash-equivalents being transferred into and out of a business.

Common Stock

A form of corporate equity ownership, a type of security representing ownership in a corporation and a claim on part of the corporation's profits.

Statement of Cash Flows

A financial overview showing the cumulative cash inflows from a company's daily operations and investment receipts, against the total cash outlays for operational and investment expenditures during a nominated period.

Financing Activity

Transactions between a business and its financiers, such as issuing stock, paying dividends, or borrowing from lenders, reflecting the flow of cash used to fund the company's operations and expansions.