Compute shamrocks roe directly

Assignment Help Portfolio Management

Reference no: EM13924399

The Shamrock Vegetable Company has the following results.

Net sales	$6,000,000
Net total assets	4,000,000
Depreciation	160,000
Net income	400,000
Long-term debt	2,000,000
Equity	1,160,000
Dividends	160,000

a. Compute Shamrock's ROE directly. Confirm this using the three components.

b. Using the ROE computed in Part a, what is the expected sustainable growth rate for Shamrock?

c. Assuming the firm's net profit margin went to 0.04, what would happen to Shamrock's ROE?

d. Using the ROE in Part c, what is the expected sustainable growth rate? What if dividends were only $40,000?

Reference no: EM13924399

Questions Cloud

What is the sociological imagination : What is the Sociological Imagination? Why is it important to understanding what happens in the world around us? How can using a sociological imagination help solve problems facing the world today

Why you would expect it to have a high or low retention rate : A firm is earning 24 percent on equity and has low business and financial risk. Discuss why you would expect it to have a high or low retention rate.

Sufficient evidence to reject the null hypothesis : In a two-tailed hypothesis testing at significance level α of 0.05, the test statistic is calculated as 2. If P(X >2) = 0.03, then we have sufficient evidence to reject the null hypothesis.

What aspects of external environment likely to affect iteam : What aspects of the internal (organizational) environment at iTeam are most likely to affect its future planning, and what impact might each factor have?

Compute shamrocks roe directly : Compute Shamrock's ROE directly. Confirm this using the three components. Using the ROE computed in Part a, what is the expected sustainable growth rate for Shamrock?

Explain what you interpret about the target audience : Evaluate the message that is conveyed from what you observe from this digital footprint. Explain what you interpret about the target audience/users for this site.

Fisheries and conservation department : Routine surveillance by the Agriculture, Fisheries and Conservation Department (AFCD) has detected the presence of low pathogenic avian influenza A (H7N9) in a chicken cloacal sample from the Cheung Sha Wan Temporary Wholesale Poultry Market in Ho..

Construct the variables that you need in order to estimate : ECOM094 - a. Using the data contained in the dataset, construct the variables that you need in order to estimate eq. (1). b. Estimate eq. (1), report the results and comment on them. Are the results consistent with Taylor’s theory? Explain.

An information security risk assessment for the organisation : Based on the case study supplied,write a report that includes, An Information Security Risk Assessment for the organisation (Wolftech). A good answer will identify threats, vulnerabilities, and impacts. It will include priorities and risk treatment o..

User Account

All Pages