In 1936, the Supreme Court of the United States declared the…

In 1936, the Supreme Court of the United States declared the Agriculture Adjustment Act of 1933 unconstitutional. Justice Owen Roberts provided the following explanation for the Court’s decision. We are not now required to ascertain the scope of the phrase “general welfare of the United States” or to determine whether an appropriation in aid of agriculture falls within it. Wholly apart from that question, another principle embedded in our Constitution prohibits the enforcement of the Agricultural Adjustment Act. . . . It is a statutory plan to regulate and control agricultural production, a matter beyond the powers delegated to the federal government. —United States v. Butler, 1936 Which constitutional amendment did the Supreme Court use as a basis of this ruling?

Assume that you are on the financial staff of Carlisle Corpo…

Assume that you are on the financial staff of Carlisle Corporation, and you have collected the following data:  (1) The yield to maturity on the company’s outstanding 10% annual coupon bonds is 8%, and its tax rate is 25%.  (2) The risk-free rate is 3.5%, the market risk premium (rM – rRF) is 5.5%, and the firm’s beta is 1.10.  (3) The firm’s capital structure consists of 45% debt and 55% equity.  What is Carlisle’s WACC?

You have been assigned the task of using the corporate, or f…

You have been assigned the task of using the corporate, or free cash flow, model to estimate Matthias Corporation’s intrinsic value.  The firm’s WACC is 12%, its end-of-year free cash flow (FCF1) is expected to be $525 million, and the FCFs are expected to grow at an 18% rate for each of the next two years (t = 2 and 3).  After t = 3, the free cash flows are expected to grow forever at a constant rate of 5% per year.  The firm has $330 million of nonoperating assets.  The company has $317.71 million in long-term debt, no preferred stock, and it has 150 million shares of common stock outstanding.  What is the firm’s estimated intrinsic value per share of common stock?