QUESTION DFB, Inc.,expects earnings this year of $5 per share, and it plans to pay a $3 dividend toshareholders. DFB will retain $2 per share of its earnings to reinvest in new projects thathave an expected return of 15% per year. Suppose DFB will maintain the same dividendpayout rate, retention rate, and re¦ DFB, Inc.,expects […]
QUESTION ABC Company was founded in 20X1 and had the following taxable income through 20X6:20X120X220X320X420X520X6$2.5M$8.5M$7.8M-$17.6M$12.3M$16.4MCompute the corporate income tax or tax refund ineach year, assuming the graduated tax rates listed below.At leastBut less thanTax Rate (%)Tax Calculation0.0050¦ 20Ã1 -2500000 =113900 0.34(2500000-335000) = 850000 20Ã2 -8500000 =113900 0.34(8500000-335000) = 2890000 20Ã3 -7800000 =113900 0.34(7800000-335000) = 2652000 […]
QUESTION 5. Executive Cheese has issued debt with a market value of $100 million and hasoutstanding 15 million shares with a market price of $10 a share. It now announcesthat it intends to issue a further $60 million of debt and to use the proceeds to buyback common stock. Debtholders, seeing the extra risk,¦ Liabilities […]
QUESTION A. Assuming a constant rate for purchases, production, and sales throughout the year, what are Casa de Disenos existing operating cycle (OC), cash conversion cycle (CCC), and resource investment need? If Lean can optimize Casa de Disenos operations according to industry standards, what will Casa de Disenos operating (OC), cash conversion cycle (CCC), and […]
QUESTION 2. You are considering purchasing a consol that promises annual payments of $4.a. If the current interest rate is 5 percent, what is the price of the consol?b. You are concerned that the interest rate may rise to 6 percent. Compute the percentage change in the price of the consol and the percentage ¦ […]
QUESTION Abacus Co. wishes to maintain a growth rate of 11.8 percent a year, a debtequity ratio of 1.7, and a dividend payout ratio of 20 percent. The ratio of total assets to sales is constant at 0.89.What profit margin must the firm achieve? Solution: For Abacus Co.: Sustainable Growth Rate = ROE*(1-Dividend Payout Ratio) […]
QUESTION what is working capital? and explain in brief the various sources of working capital? Solution: Working capital is defined as a financial metric that representsthe operating liquiditywhich is available to an organization, business, or other government entity. It is a measure of both a companys short term financial position and its efficiency. It is […]
QUESTION Document Preview: Q. Terry martinez is considering taking out a loan to purchase a desk. The furniture store manager rarely finanaces purchases purchases but will for tery as a special offer. the rate will be 10% per year. and because the desk costs 600$ the interest will come to 60$ for a one-year loan. […]
QUESTION wanna get definition of above all 1. Modern finance theory indicates that the assumption of managerial role is to maximize the value of the firm. In other words to maximize the price of the stock. Wealth maximization is preferred due to 4 reasons 1) Building wealth for long term 2) Risk or Uncertainty 3) […]
QUESTION Great Pumpkin Farms (GPF) just paid a dividend of $5 on its stock. The growth rate in dividends is expected to be a constant 3 percent per year indefinitely. Investors require a 16 percent return on the stock for the first 3 years, a 11 percent return for the next 3 years, and an […]
