Homework Answers
1). Internal Growth Rate = ROA * Retention Rate
= [Net Income / Total Assets] * [Addition to Retained Earnings / Net Income]
= [5 / 54] * [5 / 5] = 0.0926 * 1 = 0.0926, or 9.26%
2). Sustainable Growth Rate = ROE * Retention Rate
= [Net Income / Total Equity] * [Addition to Retained Earnings / Net Income]
= [5 / 37.8] * [5 / 5] = 0.1323 * 1 = 0.1323, or 13.23%
Add Answer to:
Problem 11 Intro Your company's most recent income statement and balance sheet are given below: Income...
A late penalty of 70% will apply to new answers. Intro Below is the balance sheet...
A late penalty of 70% will apply to new answers. Intro Below is the balance sheet for Northern Comfort Company for December 31 of 2018 and 2019. Cash Accounts receivable Inventory Current assets Net fixed assets 2018 2019 850 1,000 2,550 3,000 2,550 3,000 5,950 7,000 11,050 13,000 17,000 20,000 2018 2019 Accounts payable 2,550 3,000 Current liabilities 2,550 3,000 Long-term debt 5 ,100 6,000 Total liabilities 7,650 9,000 Equity 9,350 11,000 Total liab. & equity 17,000 20,000 Total assets...
Intro NiteLate Inc. had revenue of $164,000 last year, costs of $98,400 and depreciation of $24,600....
Intro NiteLate Inc. had revenue of $164,000 last year, costs of $98,400 and depreciation of $24,600. The company paid 6.1% interest on its debt, and its average tax rate is 0.25. NiteLate paid out $16,400 in dividends, and wants to maintain the same dividend payout ratio in the future. At the beginning of the year, the company had a book value of debt of $48,000 and a book value of equity of $40,000. Over the course of the year, no...
Intro Below is the balance sheet for Rumble Clock Inc. for December 31 of 2018 and...
Intro Below is the balance sheet for Rumble Clock Inc. for December 31 of 2018 and 2019. 2018 900 2019 1,050 Cash Accounts receivable Inventory Current assets Net fixed assets 2,700 3,150 2,700 3,150 6,300 7,350 11,700 13,650 2018 2,700 2,700 ,400 8,100 9,900 Accounts payable Current liabilities Long-term debt Total liabilities Equity Total liab. & equity 2019 3,150 3,150 6,300 9,450 11,550 5 Total assets 18,000 21,000 18,000 21,000 The income statement for 2019 is also given: Sales Cost...
Intro Bubble Tree Inc. had a taxable income of $380,000 last year. Its average tax rate...
Intro Bubble Tree Inc. had a taxable income of $380,000 last year. Its average tax rate is 27% and it paid out $120,000 in dividends to preferred stockholders. The company has 16,000 shares of common stock outstanding. Part 1 IS Attempt 1/10 for 10 pts. What were Bubble Tree's earnings per share of common stock (EPS)? 1+ decimals Submit Part 2 - Attempt 1/10 for 10 pts. If Bubble Tree pays out a dividend of $7.87 for each share of...
Problem 8 Intro A stock has a beta of 1.4. The risk-free rate is 2%. Assume...
Problem 8 Intro A stock has a beta of 1.4. The risk-free rate is 2%. Assume that the CAPM holds. Part 1 18 Attempt 1/10 for 10 pts. What is the expected return for the stock if the expected return on the market is 11%? 3+ decimals Submit IB Attempt 1/10 for 10 pts. Part 2 What is the expected return for the stock if the expected market risk premium is 11%? 3+ decimals Submit
Intro Pro Build Inc. has had a net income of $16 million in its most recent...
Intro Pro Build Inc. has had a net income of $16 million in its most recent year. Net income is expected to grow by 3% per year. The firm always pays out 30% of net income as dividends and has 5 million shares of common stock outstanding. The required return is 8%. Attempt 1/1 for 10 pts. Part 1 What is the current stock price? 11+ decimals Submit DA amilala BOND MacBook Pro
Intro IBM just paid an annual dividend of $4.3 per share. The dividend is expected to...
Intro IBM just paid an annual dividend of $4.3 per share. The dividend is expected to grow by 5% per year. The required rate of return is 12%. IB Part 1 Attempt 1/10 for 10 pts. By DDM/Gordon growth model, what is the price to sell the stock in 3 years? 1+ decimals Submit Part 2 Attempt 1/10 for 10 pts. If you buy the stock today, hold it, sell it in 3 years at the price computed in Part...
Problem 16 Intro Use the expected return-beta equation from the CAPM. Part 3 IB - Attempt...
Problem 16 Intro Use the expected return-beta equation from the CAPM. Part 3 IB - Attempt 2/5 for 10 pts. What is beta if the risk-free rate is 3%, the expected return 12% and the expected market return 9%? 2+ decimals Submit 18 | Part 4 Attempt 1/5 for 10 pts. What is the expected market return if the risk-free rate is 3%, beta 1 and the expected return 12%? 3+ decimals Submit
Intro 8 years ago, a new machine cost $8 million to purchase and an additional $490,000...
Intro 8 years ago, a new machine cost $8 million to purchase and an additional $490,000 for the installation. The machine was to be linearly depreciated to zero over 15 years. The company has just sold the machine for $4.8 million, and its marginal tax rate is 25%. Part 1 Attempt 1/5 for 10 pts. What is the annual depreciation? No decimals Submit IB Attempt 1/5 for 10 pts. Part 2 What is the current book value? No decimals Submit...
Problem 12 Intro A stock just paid an annual dividend of $1.1. The dividend is expected...
Problem 12 Intro A stock just paid an annual dividend of $1.1. The dividend is expected to grow by 10% per year for the next 4 years. The growth rate of dividends will then fall steadily by 1.25% per year, from 10% in year 4 to 5% in year 8 and stay at that level forever. The required rate of return is 12%. 18 Attempt 6/10 for 10 pts. Part 1 What is the expected dividend in 8 years? 2+...
A late penalty of 70% will apply to new answers. Intro Below is the balance sheet for Northern Comfort Company for December 31 of 2018 and 2019. Cash Accounts receivable Inventory Current assets Net fixed assets 2018 2019 850 1,000 2,550 3,000 2,550 3,000 5,950 7,000 11,050 13,000 17,000 20,000 2018 2019 Accounts payable 2,550 3,000 Current liabilities 2,550 3,000 Long-term debt 5 ,100 6,000 Total liabilities 7,650 9,000 Equity 9,350 11,000 Total liab. & equity 17,000 20,000 Total assets...
Intro NiteLate Inc. had revenue of $164,000 last year, costs of $98,400 and depreciation of $24,600. The company paid 6.1% interest on its debt, and its average tax rate is 0.25. NiteLate paid out $16,400 in dividends, and wants to maintain the same dividend payout ratio in the future. At the beginning of the year, the company had a book value of debt of $48,000 and a book value of equity of $40,000. Over the course of the year, no...
Intro Below is the balance sheet for Rumble Clock Inc. for December 31 of 2018 and 2019. 2018 900 2019 1,050 Cash Accounts receivable Inventory Current assets Net fixed assets 2,700 3,150 2,700 3,150 6,300 7,350 11,700 13,650 2018 2,700 2,700 ,400 8,100 9,900 Accounts payable Current liabilities Long-term debt Total liabilities Equity Total liab. & equity 2019 3,150 3,150 6,300 9,450 11,550 5 Total assets 18,000 21,000 18,000 21,000 The income statement for 2019 is also given: Sales Cost...
Intro Bubble Tree Inc. had a taxable income of $380,000 last year. Its average tax rate is 27% and it paid out $120,000 in dividends to preferred stockholders. The company has 16,000 shares of common stock outstanding. Part 1 IS Attempt 1/10 for 10 pts. What were Bubble Tree's earnings per share of common stock (EPS)? 1+ decimals Submit Part 2 - Attempt 1/10 for 10 pts. If Bubble Tree pays out a dividend of $7.87 for each share of...
Problem 8 Intro A stock has a beta of 1.4. The risk-free rate is 2%. Assume that the CAPM holds. Part 1 18 Attempt 1/10 for 10 pts. What is the expected return for the stock if the expected return on the market is 11%? 3+ decimals Submit IB Attempt 1/10 for 10 pts. Part 2 What is the expected return for the stock if the expected market risk premium is 11%? 3+ decimals Submit
Intro Pro Build Inc. has had a net income of $16 million in its most recent year. Net income is expected to grow by 3% per year. The firm always pays out 30% of net income as dividends and has 5 million shares of common stock outstanding. The required return is 8%. Attempt 1/1 for 10 pts. Part 1 What is the current stock price? 11+ decimals Submit DA amilala BOND MacBook Pro
Intro IBM just paid an annual dividend of $4.3 per share. The dividend is expected to grow by 5% per year. The required rate of return is 12%. IB Part 1 Attempt 1/10 for 10 pts. By DDM/Gordon growth model, what is the price to sell the stock in 3 years? 1+ decimals Submit Part 2 Attempt 1/10 for 10 pts. If you buy the stock today, hold it, sell it in 3 years at the price computed in Part...
Problem 16 Intro Use the expected return-beta equation from the CAPM. Part 3 IB - Attempt 2/5 for 10 pts. What is beta if the risk-free rate is 3%, the expected return 12% and the expected market return 9%? 2+ decimals Submit 18 | Part 4 Attempt 1/5 for 10 pts. What is the expected market return if the risk-free rate is 3%, beta 1 and the expected return 12%? 3+ decimals Submit
Intro 8 years ago, a new machine cost $8 million to purchase and an additional $490,000 for the installation. The machine was to be linearly depreciated to zero over 15 years. The company has just sold the machine for $4.8 million, and its marginal tax rate is 25%. Part 1 Attempt 1/5 for 10 pts. What is the annual depreciation? No decimals Submit IB Attempt 1/5 for 10 pts. Part 2 What is the current book value? No decimals Submit...
Problem 12 Intro A stock just paid an annual dividend of $1.1. The dividend is expected to grow by 10% per year for the next 4 years. The growth rate of dividends will then fall steadily by 1.25% per year, from 10% in year 4 to 5% in year 8 and stay at that level forever. The required rate of return is 12%. 18 Attempt 6/10 for 10 pts. Part 1 What is the expected dividend in 8 years? 2+...
Most questions answered within 3 hours.
-
Prelab Problem: You have a parallel plate capacitor
with circular plates of radius
r = 10.0...
asked 16 minutes ago -
Fine Furniture, Inc. is a furniture manufacturer located in
Norfolk, Virginia. Fine enters into a contract...
asked 13 minutes ago -
Business Ethics
Who are those codes aimed at? Is that believable?
asked 11 minutes ago -
When a black hole of mass M1 merges with a black hole of mass
M2, it...
asked 21 minutes ago -
use
hardy wineberg equation to find equilbrium.
AA 150. Aa 120. aa 90
asked 41 minutes ago -
Why don't law enforcement or prosecutors always investigate
crimes as hate crimes
asked 32 minutes ago -
Describe how Rio Tinto is a main competitor of BHP.
asked 35 minutes ago -
Two children (m = 31.0 kg each) stand opposite each other on the
edge of a...
asked 42 minutes ago -
A 2180-kg car is slowed down uniformly from 24.6 m/s to 5.2 m/s
in 3.32 s....
asked 1 hour ago -
Jesse’s Machining is looking to buy a new machine to handle a
new four-year contract for...
asked 1 hour ago -
5. A slide mount of a fungal specimen is prepared. A slide and
coverslip are flame-sterilized....
asked 1 hour ago -
A parallel plate capacitor has a charge Q, plates of area A and
separation d, where...
asked 1 hour ago