Retained earnings break point for marginal cost of capital

Assignment Help Financial Management
Reference no: EM13877741

Rolodex Inc. Balance Sheet (in millions) shows retained earnings of $110 and $20 Common Stock (20 million shares at par). Rolodex expects to generate $140 million in net income and pay $2 per share in dividends. What is Retained Earnings for the purpose of finding the Retained Earnings Break Point for the Marginal Cost of Capital?

Reference no: EM13877741

Questions Cloud

Weighted average cost of capital for use capital budgeting : Which of the following is NOT a capital component when calculating the weighted average cost of capital (WACC) for use in capital budgeting?
Calculate the times interest earned ratio : Calculate the times interest earned ratio for Tierre's Ts, Inc. using the following information. Sales = $200,000, cost of goods sold = $50,000, depreciation expense = $13,000, addition to retained earnings = $70,000, dividends per share = $0.50, tax..
Transactions occurred in the primary market : Which one of the following transactions occurred in the primary market?
What would the investor be willing to pay for the loan : A borrower has secured a 30 year, $150,000 fully amortizing fixed rate loan at 7% with monthly payments. Fifteen years later, an investor wants to purchase the loan from the lender. If market interest rates are 5%, what would the investor be willing ..
Retained earnings break point for marginal cost of capital : Rolodex Inc. Balance Sheet (in millions) shows retained earnings of $110 and $20 Common Stock (20 million shares at par). Rolodex expects to generate $140 million in net income and pay $2 per share in dividends. What is Retained Earnings for the purp..
What is the worth of this deal to the player : In 2011, a running back signed a contract worth $58.8 million. The contract called for $10 million immediately and a salary of $3 million in 2011, $8.5 million in 2012, $10 million in 2013, $8.9 million in 2014 and 2015, and $9.5 million in 2016. If ..
What is the current share price : Bui Corp. pays a constant $12 dividend on its stock. The company will maintain this dividend for the next nine years and will then cease paying dividends forever. Required: If the required return on this stock is 10 percent, what is the current share..
How much will your dream house cost by the time : You hope to buy your dream house six years from now. Today your dream house costs $189,900. You expect housing prices to rise by an average of 4.5% per year over the next six years. How much will your dream house cost by the time you are ready to buy..
Blueline publishers is considering a recapitalization plan : Blueline Publishers is considering a recapitalization plan. It is currently 100% equity financed but under the plan it would issue long-term debt with a yield of 9% and use the proceeds to repurchase common stock. The recapitalization would not chang..

Reviews

Write a Review

Financial Management Questions & Answers

  Approximate after-tax cost of debt for a new issue of bonds

The coupon rate on an issue of debt is 8%. The yield to maturity on this issue is 10%. The corporate tax rate is 31%. What would be the approximate after-tax cost of debt for a new issue of bonds?

  Future values of single cash flows for different periods

Find the following values, using the equations, and then work the problems using a financial calculator to check your answers. Disregard rounding differences. An initial $400 compounded for 2 years at 4.5%. Round your answers to the nearest cent. The..

  1 identify and explain three types of start ups firms give

1 identify and explain three types of start ups firms. give a illustration of one you have dealt with.2 what is a

  Calculate the value of the stock today

Suppose the dividend today, Do, is $2.50, and the growth rate (g) is expected to be 25% for the next 3 yrs, followed by a normal growth rate (g) of 6% thereafter. Assume the investors require 13%, rs. Calculate the value of the stock today, Po. This ..

  Question 1we have a first to default derivative written on

question 1we have a first to default derivative written on two obligors a and b. the survival probabilities are

  Determine which good each party should specialize

George and Bill are stuck together on a desert island. There are two goods, Coconut (C) and Bananas (B). George has production function 5C+B=40, while Bill has production function C+3B=36. If they could not trade, George would choose to product 6C, w..

  Bonds make semiannual payments

Heginbotham Corp. issued 20-year bonds two years ago at a coupon rate of 8.9 percent. The bonds make semiannual payments. If these bonds currently sell for 110 percent of par value, what is the YTM?

  Separate from or part of pursuing low-cost country strategy

Mattel’s global sourcing in China, like all other toy manufacturers, was based on both low-cost labor, and a growing critical mass of factories competitively vying for contract manufacturing business. Do you think the product recalls and product qual..

  Calculate the value of fraziers stock

Frazier Manufacturing paid a dividend last year of $2, which is expected to grow at a constant rate of 5%. Frazier has a beta of 1.3. If the market is returning 11% and the risk-free rate is 4%, calculate the value of Frazier's stock.

  What would be the value of the bond in this case

XYZ Company is planning to issue some bonds. The bonds, with a $5,000 par value and the coupon rate of 12% will mature in 10 years. The interest will be paid semi annually. Suppose two years later from the original issuing date, the going rate in the..

  Financial performance planning monitoring

Explain if the source of cash sustainable, and list any outstanding variances - Write down what processes and data you would analyse when looking at the following scenarios and write down any improvements.

  Bonds make annual payments-what is the current bond price

Lycan, Inc., has 8.8 percent coupon bonds on the market that have 7 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 10.8 percent, what is the current bond price?

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