Dividends or re-purchase any shares

Assignment Help Finance Basics
Reference no: EM131941180

What formula would you use for this question?

Imagine a corporation with $1,000,000 of assets and a debt ratio of 40%. Roe (return on equity) is expected to be 20% for the foreseeable future. Assume the firm keeps the same amount of debt indefinitely (as opposed to keeping the same debt ratio).

a) What do you expect the firm's earning to be for the next 3 years if the firm doesn't pay out any dividends or re-purchase any shares?

Reference no: EM131941180

Questions Cloud

Why is there a multiplier effect on the quantity of money : Suppose the Fed conducts an open market operation in which it buys government securities. Why is there a multiplier effect on the quantity of money?
What is the project internal rate of return : The project has an exact payback of 2.85 years. What is the project's internal rate of return (IRR)?
What will be the price of the company : The company's analysts predict that earnings (and dividends) will decline at a rate of 5% annually forever. Assume that r = 8% and Div0 = $2.00.
Why is overstatement of inflation statistics a problem : Why is the understatement of unemployment statistics a problem? Why is overstatement of inflation statistics a problem?
Dividends or re-purchase any shares : What do you expect the firm's earning to be for the next 3 years if the firm doesn't pay out any dividends or re-purchase any shares?
Inflation rate will be over the next year : An investment offers a total return of 12 percent over the coming year. Thomas thinks the total real return on this investment will be only 7.8 percent.
Under what conditions is the statement correct : How does the estimate differ if the discount rate is 5 percent? Under what conditions is the statement correct?
Why there is no constant intercept in the function : Why it has to be a cubic function? Why there is no constant (intercept) in the function? Explain briefly in your own words.
Determining the expected market return : What would be a firm's WACC if the risk free rate was 4%, the expected market return was 6%, the firm's marginal tax rate was 35%

Reviews

Write a Review

Finance Basics Questions & Answers

  Use constant growth model to calculate price of the stock

IP Corporation is expected to pay $1.70 dividends next year. The dividend growth rate is expected to be 7 percent forever. If the required rate of return for IP is 10 percent.

  Rntal revenue 6000 freight-out 1800 rent expense 8800 and

the trial balance of revere finest foods on december 31 shows merchandise inventory 25000 sales 162400 sales returns

  What is the total cost over the first year to invest in fund

The commission on the purchase price is 3%, and the fund charges a 1% annual management fee and a $10 annual administrative charge. What is the total cost over the first year to invest in this fund?

  What is the vertical common-sized analysis of all items

The following information is available regarding sales revenue for March and April, Year 0007: What is the vertical common-sized analysis (percentages).

  Constant marginal cost

The Stafford coal seam contains 25,000 tons of coal. It costs $100 per ton to extract the coal and deliver it to the market.

  You have just won the lottery and will receive 1000000 in

you have just won the lottery and will receive 1000000 in one year. you will receive payments for 30 years and the

  Question regarding the uniform probability

Consider a spinner that, after a spin, will point to a number between zero and 1 with "uniform probability". Determine the probability: P(1⁄6 ≤ X ≤ 19⁄42).

  Defined pension recipients

Due to the considerable age of the defined pension recipients, you don't expect to maintain this portfolio for much longer.

  What is the npv of the decision to purchase a new machine

What is the NPV of the decision to purchase a new machine? (Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16). Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.)

  Explain what are two critical operating assumptions

What are operating profits and invested cpital expected to be next year? What are two critical operating assumptions (identify one for profits, and one for capital) embedded in this forecast method?

  How many shares are issued

How many more shares can be issued without the approval of shareholders?

  What property is included in the estate tax

What property is included in the estate tax? Also, what are the deductions and credits included in this tax?

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