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    You Have Recently Been Hired by Layton Motors Inc Lmi

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    Amit Pandey
    You have been hired by Layton Motors Inc (LMI), a company founded 8 years ago by Rachel Layton to manufacture electric vehicles with a battery that allows for a 700 mile range. The company is privately owned by Rachel and her family and had $197 million in sales last year. This document provides instructions for analyzing publicly available financial information for Tesla Motors (TSLA) to estimate the cost of capital for LMI, but notes there may be issues applying TSLA's estimates directly to LMI since it is a private company.

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    You Have Recently Been Hired by Layton Motors Inc Lmi

    Uploaded by

    Amit Pandey
    63 views1 page
    You have been hired by Layton Motors Inc (LMI), a company founded 8 years ago by Rachel Layton to manufacture electric vehicles with a battery that allows for a 700 mile range. The company is privately owned by Rachel and her family and had $197 million in sales last year. This document provides instructions for analyzing publicly available financial information for Tesla Motors (TSLA) to estimate the cost of capital for LMI, but notes there may be issues applying TSLA's estimates directly to LMI since it is a private company.

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    You have been hired by Layton Motors Inc (LMI), a company founded 8 years ago by Rachel Layton to manufacture electric vehicles with a battery that allows for a 700 mile range. The company is privately owned by Rachel and her family and had $197 million in sales last year. This document provides instructions for analyzing publicly available financial information for Tesla Motors (TSLA) to estimate the cost of capital for LMI, but notes there may be issues applying TSLA's estimates directly to LMI since it is a private company.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    63 views1 page

    You Have Recently Been Hired by Layton Motors Inc Lmi

    Uploaded by

    Amit Pandey
    You have been hired by Layton Motors Inc (LMI), a company founded 8 years ago by Rachel Layton to manufacture electric vehicles with a battery that allows for a 700 mile range. The company is privately owned by Rachel and her family and had $197 million in sales last year. This document provides instructions for analyzing publicly available financial information for Tesla Motors (TSLA) to estimate the cost of capital for LMI, but notes there may be issues applying TSLA's estimates directly to LMI since it is a private company.

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    © All Rights Reserved
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    Solved: You have recently been hired by Layton Motors Inc

    LMI
    You have recently been hired by Layton Motors Inc LMI

    You have recently been hired by Layton Motors, Inc. (LMI), in its relatively new treasury
    management department. LMI was founded eight years ago by Rachel Layton. Rachel found a
    method to manufacture a cheaper battery that will hold a larger charge, giving a car powered by
    the battery a range of 700 miles before requiring a recharge. The cars manufactured by LMI are
    midsized and carry a price that allows the company to compete with other mainstream auto
    manufacturers. The company is privately owned by Rachel and her family, and it had sales of
    $197 million last year.
    1. Most publicly traded corporations are required to submit quarterly (10Q) and annual reports
    (10K) to the SEC detailing the financial operations of the company over the past quarter or year,
    respectively. These corporate filings are available on the SEC website at www.sec.gov. Go to
    the SEC website, follow the "Search EDGAR for Company Filings" link, and search for SEC
    filings made by Tesla Motors (TSLA). Find the most recent 10Q or 10K, and download the form.
    Look on the balance sheet to find the book value of debt and the book value of equity.
    2. To estimate the cost of equity for TSLA, go to finance.yahoo.com and enter the ticker symbol
    TSLA. Follow the links to answer the following questions: What is the most recent stock price
    listed for TSLA? What is the market value of equity, or market capitalization? How many shares
    of stock does TSLA have outstanding? What is the most recent annual dividend? Can you use
    the dividend discount model in this case? What is the beta for TSLA? Now go back to
    finance.yahoo.com and follow the "Bonds" link. What is the yield on three-month Treasury bills?
    Using the historical market risk premium, what is the cost of equity for TSLA using CAPM?
    3. You now need to calculate the cost of debt for TSLA. Go to finra-markets.morningstar.com
    /BondCenter/, enter TSLA as the company, and find the yield to maturity for each of TSLA's
    bonds. What is the weighted average cost of debt for TSLA using the book value weights and
    using the market value weights? Does it make a difference in this case if you use book value
    weights or market value weights?
    4. You now have all the necessary information to calculate the weighted average cost of capital
    for TSLA. Calculate this using book value weights and market value weights, assuming TSLA
    has a 35 percent marginal tax rate. Which number is more relevant?
    5. You used TSLA as a pure play company to estimate the cost of capital for LMI. Are there any
    potential problems with this approach in this situation?

    You have recently been hired by Layton Motors Inc LMI

    ANSWER
    https://solvedquest.com/you-have-recently-been-hired-by-layton-motors-inc-lmi/

    Reach out to [email protected] for enquiry.


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