Reference no: EM132820840

Questions -

Q1. If Superior Paint Company reports $ 50 million in retained earnings, can it declare a dividend for the same amount? Explain.

Q2. Cell Enterprise Corporation in its financial statements reported $ 55 million of net income and $ 320 million of retained earnings. Previous retained earnings were $ 525 million. Determine the amount of dividend payment to shareholders.

Q3. Calculate the value of a common stock that pays a dividend of $ 50 annually if the expected return is 8%.

Q4. At the end of last year, River Side Company achieved $ 9 million in revenue (EBITDA). Depreciation expense was $ 2.2 million, with interest paid of $ 900,000 and a corporate tax rate of 32%. At the end of the fiscal year, it had current assets totaling $ 12 million, $ 2 million in accounts payable, $ 1.4 million in accumulated debt, $ 1.2 million in other debts payable, and $ 7 million in property, plant and equipment. Assume that the River Side company does not have excess cash, uses debt and equity to finance its operations, has no current liabilities, and recognizes depreciation periodically. Determine the net income or loss of the business. Calculate the net working capital and the operating working capital.

Q5. The assets of the Karma Lin Corp. company include current assets, property, plant and equipment; the company does not have excess cash (Free Cash). It has assets valued at $ 5 million and its fixed assets are valued at $ 3 million. It reports debts payable of $ 450,000, long-term debts of $ 750,000 and equity of $ 3 million. Your balance sheet reflects that you have accounts payable and accumulated debts. Generally, the company operates on a debt and equity basis. Determine the total amount of the company's debt. Calculate the balance of current assets and liabilities.

Q6. The balance sheet of the Polinezo Industries company reflects a capital of $ 650 million, the price of the shares is $ 90 per share and its market value added (MVA) is $ 60 million. Determine the common shares that are outstanding.

Q7. Rivera Corporation has an operating income of $ 3 million and a tax rate of 32%. The invested capital is $ 12 million and the after-tax percentage cost of capital is 9%. Determine the economic value added (EVA) of the company.

Q8. The Hamilton Company had $ 150,000 in cash at the end of 2019 and $ 75,000 at the end of 2018. Hamilton invested $ 300,000 in property, physical plant and equipment. Cash flow from financing activities totaled $ 150,000. Determine the cash flow from operating activities.

Q9. Renew Life Industries has an EBIT of $ 28 million, a depreciation of $ 3 million, and a tax rate of 38%. Renew Life invests $ 8 million in fixed assets and $ 13 million to increase current assets. Accounts payable is expected to increase by $ 3 million, accruals to total $ 2 million, and obligations to increase to $ 6 million. Determine the available cash flow.