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You manufacture hunting pack systems in China for 80 dollars each, including shipping. The manufacturing costs only include variable costs. Variable costs are not calculated as a percentage of sales in this case. Sales are a function of the number of packs sold and the price per pack. Likewise, variable costs are a function of the number of packs sold and the cost to produce each pack. You sell these packs to retailers for 200 dollars each. In the current year you will sell 100,000 packs. Your fixed costs including such items as insurance, marketing, travel, shows, office supplies, warehouse rentals etc. totals 5 million dollars this year and are not part of the 80 dollars per pack manufacturing cost. The federal income tax rate for your company is 40 percent.Your company is publicly traded on the NASDAQ with 1,000,000 shares outstanding. a. Please create a current income statement using the same format as found in the lecture. b. Please calculate earnings per share. c. Please calculate the price/earnings multiple assuming that the current stock price is 10 dollars per share. 2. Create a two-year forecast of the income statement from the information provided in problem number one. Please create three columns of data: current year, year 2, and year 3. Assume that sales increase ten percent per year for year’s two and three. Please show the earnings per share for each of the three years. 3. Please estimate the stock price for year’s two and three, assuming that the current PE multiple remains constant for each of the two forecasted years.
Its pretax cost of preferred equity is 7%, and its pretax cost of debt is 5%. If the corporate tax is 35%, what is the weighted average cost of capital?
Sam is a sole proprietor who owns, leases, and manages several apartment complexes and office buildings. During the current year, Sam incurs the following expenses.
financial management class and would like assistance with the followingprepare a pro forma forecast for the next fiscal
If the correlation between D and E are o.5 and D has a standard deviation of 0.4 and E has a standard deviation of 0.6, determine combined portfolio standard deviation if you put 40% in D?
Each of the following problems is unrelated to the others.
Computer Corp reinvests 60% of its earnings in the firm. The sotck sells for $60.00 and teh next dividends will be 1.80 per share. The discount rate is 14%. What is the rate of return on the company's reinvesed funds?
The critical importance of money, bond, stock and mortgage markets as potential investment options is highlighted in terms of their impact on financial sector. Describe the linkages between each market, and how investors' choices would be affected.
1 name three of the ten change forces.2 the greatest change force is technological changes ndash true or false?3 what
An 8-year corporate bond has a yield of 8.3%, which includes a liquidity premium of 0.75%. What is its default risk premium?
Why we think the capital from retained earnings is not free? When we compute the cost of this type of capital, the influence of taxation is considered or not? Explain.
A not-for profit nursing home has total expenses of $20 million, sales tax in the state is 7 percent, expenses are broken down into salaries (12 million dollar), supplies (6 million dollar), and pharmacy (2 million dollar).
You make $4,800 annual deposits into a retirement account that pays 10.5 percent interest compounded monthly.
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