59)During the coming year, Gold & Gold wants to increase its free cash flow by $180 million, which should result in a higher stock price. The CFO has made these projections for the upcoming year: ∙EBIT is projected to equal $852 million.∙Gross capital expenditures are expected to total to $360 million versus depreciation of $120 million, so its net capital expenditures should total $240 million.∙The tax rate is 25%.∙There will be no changes in cash or marketable securities, nor will there be any changes in notes payable or accruals.What increase in net working capital (in millions of dollars) would enable the firm to meet its target increase in FCF? a.$379 b.$219 c.$263 d.$316 e.$17563)If D 1 = $1.50, g (which is constant) = 6.5%, and P 0 = $56, what is the stock's expected capital gains yield for the coming year? a.6.50% b.7.52% c.7.90% d.7.17% e.6.83% 64)Shulman Inc. has the following data, in thousands. Assuming a 365-day year, what is the firm's cash conversion cycle? Annual sales =$45,000Annual cost of goods sold =$30,000Inventory =$4,500Accounts receivable =$1,800Accounts payable =$2,500 a.43 days b.32 days c.35 days d.28 days e.39 days

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Answered: 59) During the coming year, Gold &…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter21: Dynamic Capital Structures And Corporate Valuation

Section: Chapter Questions

Problem 9P

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59)

During the coming year, Gold & Gold wants to increase its free cash flow by $180 million, which should result in a higher stock price. The CFO has made these projections for the upcoming year:

∙	EBIT is projected to equal $852 million.
∙	Gross capital expenditures are expected to total to $360 million versus depreciation of $120 million, so its net capital expenditures should total $240 million.
∙	The tax rate is 25%.
∙	There will be no changes in cash or marketable securities, nor will there be any changes in notes payable or accruals.

What increase in net working capital (in millions of dollars) would enable the firm to meet its target increase in FCF?

	a.	$379
	b.	$219
	c.	$263
	d.	$316
	e.	$175

63)

If D ₁ = $1.50, g (which is constant) = 6.5%, and P ₀ = $56, what is the stock's expected capital gains yield for the coming year?

	a.	6.50%
	b.	7.52%
	c.	7.90%
	d.	7.17%
	e.	6.83%

64)

Shulman Inc. has the following data, in thousands. Assuming a 365-day year, what is the firm's cash conversion cycle?

Annual sales =	$45,000
Annual cost of goods sold =	$30,000
Inventory =	$4,500
Accounts receivable =	$1,800
Accounts payable =	$2,500

	a.	43 days
	b.	32 days
	c.	35 days
	d.	28 days
	e.	39 days

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