Assuming all costs vary proportionately with sales

Assignment Help Financial Management
Reference no: EM131495306

The Atlantic Co. has sales of $21,600, total costs of $16,780 and taxes of $1,750. The dividend payout ratio is 12 percent. Sales are expected to increase by 22 percent next year. What is the pro forma addition to retained earnings assuming all costs vary proportionately with sales?

$2,899

$3,745

$3,892

$2,011

$3,296

Reference no: EM131495306

Questions Cloud

Investment firm that focuses on opportunities : Blackrock Capital is an investment firm that focuses on opportunities in South America.
Expected annualized yield from this transaction : Determine Earl's expected annualized yield from this transaction.
Determine kevins annualized yield on this investment : Determine Kevin's annualized yield on this investment.
Firm need to reach the cash break-even point : How many units does the firm need to reach the cash break-even point?
Assuming all costs vary proportionately with sales : Sales are expected to increase by 22 percent next year. What is the pro forma addition to retained earnings assuming all costs vary proportionately with sales?
What is the expected payout ratio : If Bike uses residual distribution model to determine next year’s distribution and makes all distributions in form of dividends, what is expected payout ratio?
Compute landon self-employment tax liability : Compute Landon’s self-employment tax liability and the allowable income tax deduction of the self-employment tax paid.
What is palm trees intrinsic value of equity : What is Palm Tree’s intrinsic value of equity? What is its intrinsic stock price per share?
Cost of equity under new capital structure : The Tech Hardware Company is trying to estimate its optimal capital structure. Determine Tech’s new cost of equity under the new capital structure with 45% debt

Reviews

Write a Review

Financial Management Questions & Answers

  Dollars in investment account and retirement account

Tim wants to have 257,897 dollars in his investment account in 7 years from today. He expects to earn a return of 9.57 percent per year in that account. Tim plans to make regular, equal savings contributions of X per year to his account for 7 years, ..

  What the underlying asset is-strike price-time to expiration

Suppose you are managing a stock portfolio that is currently valued at $2,000,000. You expect the stock market will be bullish in the next 6 months. How would you hedge against your portfolio value dropping below $1.8M in 6 months? Be specific with y..

  Considering a project with an initial fixed asset cost

Gateway Communications is considering a project with an initial fixed asset cost of $2.46 million which will be depreciated straight-line over the 10-year life of the project. At the end of the project the equipment will be sold for an estimated salv..

  Bank required by law to report to potential borrowers

Tai Credit Corp. wants to earn an effective annual return on its consumer loans of 14.3 percent per year. The bank uses daily compounding on its loans. What interest rate is the bank required by law to report to potential borrowers?

  Reasonable costs of capital for average-risk-high-risk

Distinguish between beta (i.e market) risk, within-firm ( i.e, corporate) risk, and stand-alone risk for a potential project. Of the three measures, which is theoretically the most relevant, and why? Suppose a firm estimates its overall cost of capit..

  Create portfolio that has an expected return

You have $112,000 to invest in a portfolio containing Stock X, Stock Y, and a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 12 percent and that has only 76 percent of the risk of..

  Create preformed income statement and preformed cash flows

You have been hired as a consultant by Chug and Slug Unlimited to determine if the company should proceed with a new set of crab mallets to sell to Maryland crab lovers. Chug and Slug projects sales of 30,000 packs per year for 4 years at a price of ..

  What is price of european put option

The price of a European call which expires in 6 months and has a strike price of $30 is $2.00. The underlying stock's price is $29 and a dividend of $.50 is expected in 2 months and in 5 months. The term structure is flat with all risk free interest ..

  Discuss the performance and financial position

Discuss the performance and financial position of the three companies and in your discussion highlight the possible causes of the differences between the three companies.

  The expected return of your portfolio is nothing

You have ?$57,000. You put 20?% of your money in a stock with an expected return of 14%, ?$40,000 in a stock with an expected return of 18?%, and the rest in a stock with an expected return of 21?%. What is the expected return of your? portfolio? The..

  With reference to active versus passive portfolio management

Recall the EMH you learned in week 3. if everyone in the market believes in resistance levels, why do these beliefs not become self-fulfilling prophecies? With reference to the active versus passive portfolio management, what would happen to the mark..

  Target debt-equity ratio-cost of equity and debt

Sixx AM Manufacturing has a target debt-equity ratio of 0.46. Its cost of equity is 14 percent, and its cost of debt is 7 percent. If the tax rate is 36 percent, what is the company's WACC?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd