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Last year Blease Inc had a total assets turnover of 1.33 and an equity multiplier of 1.75. Its sales were $205,000 and its net income was $10,600. The firm finances using only debt and common equity and its total assets equal total invested capital.
The CFO believes that the company could have operated more efficiently, lowered its costs, and increased its net income by $10,250 without changing its sales, assets, or capital structure.
Had it cut costs and increased its net income by this amount, how much would the ROE have changed? Do not round your intermediate calculations.
REH? Corporation's most recent dividend was $1.98 per? share, its expected annual rate of dividend growth is 5?%, and the required return is now 15?%. A variety of proposals are being considered by management to redirect the? firm's activities. Deter..
Suppose there are two assets available to an investor. One is risk-free and has a return of 3 percent. The other is risky and has an expected return of 8 percent and a variance of 0.05. The investor’s utility is given by U(r) = (2/3) E(r) − (1/2) AV ..
What is the value of firm L according to MM's proposition 1 with corporate taxes and micky is the holder of $30,000 worth of L's stock. What rate of return can he expect, assuming a dividend payout of 100%.
Consider the impact of external financing on the additional funds needed (AFN) to determine how much additional interest or dividends must be paid to support expected growth?that is, consider financing feedbacks.
A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: Year Cash Flow 0 –$ 27,700 1 11,700 2 14,700 3 10,700 what is the NPV for the project if the required return is 12 per..
Zeniba Inc.’s stock is currently selling for $23.56 per share. The company just paid a dividend = $2.00 per share (i.e., D0 = $2.00), and investors expect the dividend to grow at a constant rate out into the future. Investors require a minimum annual..
River bend inc. received a 220,000 dividend from stock it held in hobble corporation. Riverbend's taxable income is 3,020,000 before deducting the dividends received deduction (DRD), a 23,500 domestic production activities deduction,and a 189,000 cha..
A 7-year annuity of fourteen $5,800 semiannual payments will begin 9 years from now, with the first payment coming 9.5 years from now. If the discount rate is 8 percent compounded monthly, what is the value of this annuity five years from now? If the..
Complete the balance sheet and sales information using the following financial data: Total assets turnover: 1.3x Days sales outstanding: 42 daysa Inventory turnover ratio: 4x Fixed assets turnover: 2.5x Current ratio: 1.5x Gross profit margin on sale..
The company has $5.0 million interest expense and the corporate tax rate is 40 percent. What was the company's cash flow?
You are thinking about buying a car, and a local bank is willing to lend you $15,000 to buy the car. Under the terms of the loan, it will be paid off over 5 years with an APR of 6%. What would be the monthly payment on the loan? What is the interest ..
The company has no beginning or ending inventories and produced and sold 10,000 units during the month. What is the company's break-even in units? How many units would the company have to sell to attain target profits of $225,000? What is the company..
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