A firm wishes to maintain an internal growth rate of 7.8 percent and a dividend payout ratio of 40 percent. The current profit margin is 6.2 percent, and the firm uses no external financing sources. What must total asset turnover be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Total asset turnover times
Q: Identify the factors that can influence the decision-making process when managing healthcare…
A: Healthcare funding is a broader term in relation to healthcare financing. It takes into account the…
Q: Yesterday, Allied Biscuit Co. released its 2018 annual report on the company's website. While…
A: In a seemingly never ending discussion on book value of equity, market value added and economic…
Q: What is the covariance and the correlation coefficient between HD and ML? xx
A: Given standard deviation of market index σM =0.15 Therefore, the variance of market index is σM2 =…
Q: You are thinking about buying a real estate property. If you buy the property, you think you will…
A: The most that you should be willing to pay for the property is [selling price today*1/(1+r%)^t]
Q: The Clifford Corporation has announced a rights offer to raise $30 million for a new journal, the…
A: STEP 1 One of the most fundamental ideas in business and investing is a portfolio. It's a phrase…
Q: I am considering two investment options that are not mutually exclusive. (This means that both of…
A: Net present value is an important capital budgeting tool. It is the sum of all present values of…
Q: You have just made your first $5461 contribution to your retirement account. Assume you earn a…
A: Simple interest is the amount of interest earned on saving or investing some particular amount. This…
Q: Find Operating Cash Flow (OCF) annually first ten years and terminal phase, with the following…
A: The Operating Cash Flow (OCF) for the first ten years and terminal phase can be calculated as…
Q: You’re trying to save to buy a new $245,000 Ferrari. You have $50,000 today that can be invested at…
A: The savings in a bank earn compound interest as the money of the account holder earns interest in a…
Q: You have $100,000 to invest in a portfolio containing stock X, stock Y, and a risk-free asset. You…
A: Beta refers to the systematic risk of the investment or the entire investment portfolio. The…
Q: Corporations can raise capital using either debt (and must pay interest) or equity (and are expected…
A: Dividend per share is $2.15. The tax rate is 35%.
Q: In a private equity buyout, you will eventually need to exit, and the operational changes will…
A: A private equity buyout refers to a type of investment transaction in which a private equity firm…
Q: The following certificate of deposit (CD) was released from a particular bank. Find the compound…
A: Compound amount is the total amount of money in an investment after factoring in interest earned on…
Q: Investment X offers to pay you $4,700 per year for 9 years, whereas Investment Y offers to pay you…
A: Net Present Value - It is the difference between the present value of cash outflow and present…
Q: Is cryptocurrency good for the economy of any country? Explain thoroughly.
A: Cryptocurrencies are digital or virtual tokens that use cryptography to secure and verify…
Q: Your friend told you about an NFT (Non-fungible Token) that they think will be worth $1216 in 6…
A: Data given: FV=$1216 N=6 years Rate of return=16.2% Required: Calculate PV
Q: The treasurer of Tropical Fruits, Inc., has projected the cash flows of Projects A, B, and C as…
A: In the given case, the cash flows of each project is given along with the discount rate is 12% per…
Q: 1. Mr. Santos would like to have P6,500,000 in his account by the end of 6 years. How much should he…
A:
Q: Today is Derek's 25th birthday. Derek has been advised that he needs to have $2,063,188.00 in his…
A: Future value is the value that is received in the future time period, In this amount, the Interest…
Q: An investment promises the following payments: March 3 $1000; March 18 $2000; March 26 $30000 If…
A: Present value (PV) is the value of a future payment or series of future payments discounted back to…
Q: What rate compounded monthly will yield the effective rate 19.75%?
A: The effective annual rate (u) is 19.75%. The compounding period (m) is 12.
Q: Suppose that the index model for two Canadian stocks HD and ML is estimated with the following…
A: STEP 1 Systematic risk is a risk associated with the overall market, whereas unsystematic risk is a…
Q: Mark is the owner of the restaurant Mark's on the Park. At the beginning of the year, Mark had…
A: Net Income is the only factor that can affect Owner's Equity besides if owner adds more money into…
Q: Discuss the importance of monitoring and reporting on the institution's compliance with its ALM…
A: Answer Assets Liability Management(ALM) - is used for manage financial Risk as a result of mismatch…
Q: Hassan will receive the following payments at the end of the next four years: AED 50,000, AED…
A: In a typical time value of money concept based question, quantum and timing of cash flows have been…
Q: Question 2 A loan of $5400.00 was repaid together with interest of $1570.00. If interest was 12.4%…
A: NPER is the excel function used to calculate the time period.
Q: Find the amount of each payment to be made into a sinking fund which earns 7% compounded quarterly…
A: Answer Future Value $32,000 Period In Years 2.5 Rate 7% Compund Quaterly Total Periods…
Q: The cc risk free rate is 2.75%. The spot price of TFS is 33.25 and TFS pays a cc dividend of 1.0%.…
A: c. Short 1 share of stock, long C32.5, short P32.55.
Q: Find the present value of the given future amount. $43,000 for 22 months at 5% simple interest
A: Answer Future Value $43,000 Time 22 Months Period In Years 1.83 Years Rate 5%
Q: uppose that in January 2006, Kenneth Cole Productions had sales of $535 million, EBITDA of $56.5…
A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…
Q: A firm evaluates all of its projects by applying the NPV decision rule. A project under…
A: Net present value method is based on finding out the difference between present value of cash…
Q: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a…
A: Step 1: Calculation of standard deviation on portfolio The equation for the CAL is E (rc ) = r F…
Q: You are given the following data for four portfolios over a recent 10-year period: a) b) c) d)…
A:
Q: If the Canadian dollar appreciate by 5% relative to the British pound, what will be the percentage…
A: The exchange rate is the value of a country's currency in relation to the currency of another…
Q: What is Fiat money? What are the characteristics of ‘good currency or money?
A: The Fiat currency is reflective of a type of currency which is not backed by any commodity and it is…
Q: Tesla stock is currently selling for $14000. You are thinking about buying it and you hope to sell…
A: The required return on investment refers to the amount of profit that an investor requires in…
Q: Sonova Corporation has an operating income (EBIT) of $215,000 and a 40% tax rate. The firm has…
A: The operating profit (EBIT) is $215,000. The tax rate is 40%. The short term is $115,000 and…
Q: Mortgage payments Principal: $180,000.00 Interest Monthly Rate Payment 3.5% 5% 6% A. $347,760 C.…
A: STEP 1 The amount that is deducted from your outstanding loan balance is known as the principal…
Q: Mortgage payments Principal: $180,000.00 Interest Monthly Rate Payment 3.5% 5% 6% $808 $966 $1070…
A: When a loan is taken then we have to make periodic payments towards that loan. The periodic…
Q: Baxter International has an EPS of $2.00, a book value per share of $21.84, and a market/book ratio…
A: EPS =$2 Book value per share =$21.84 Market /Book ratio = 2.3 x
Q: Q5. Suppose you buy the S&R index for $ 1000 and buy a 950-strike put. Construct payoff and profit…
A: Please refer to the image below for the pay off diagram.
Q: $5.99/month for Online Bill Pay (waived with $500 in direct deposits per calendar month) on the Pure…
A: It means that the service provider ( First Hawaiian Bank ) charges $5.99 per month for the services…
Q: The Blue Oil Corporation and the Grey Plastics Company have agreed to a merger. The Grey Plastics…
A: Earnings per share is a measure of a company's earnings per outstanding share. Companies issue…
Q: The risk free rate is 8 % and the expected return on the market portfolio is 16 %. A firm is…
A: Required rate of return: It represents the required return expected by the investor for investing…
Q: A business sets up a sinking fund so they will have a $68,000.00 to pay for a replacement piece of…
A: STEP 1 PMT, which stands for "Payment" in finance, is a phrase that describes the set sum of money…
Q: Provide examples of real-world situations where ALM helped financial institutions to manage risks…
A: Asset and Liability Management (ALM) is a critical function of financial institutions that helps…
Q: tep one payments are showing as $20,00,000.00 instead of $2,000,000. Can you provide an updated…
A:
Q: Stoneheart Group is expected to pay a dividend of $2.99 next year. The company's dividend growth…
A: Formula is Current price=D1/(Required return-Growth rate)
Q: 2. A father plans to invest P350,000 on his son's birth for his son's education 7 years later. If he…
A: Interest rate: It represents the rate that is charged on the loan or the rate at which the deposit…
Q: Which of the following might be used when a parent wishes to lower the apparent profitability of its…
A: The transfer pricing is a type of pricing in which the goods will be transferred from parents to the…
I got 0.404 times just wanted to double check to see if its accurate
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
- Payne Products had $1.6 million in sales revenues in the most recent year and expects sales growth to be 25% this year. Payne would like to determine the effect of various current assets policies on its financial performance. Payne has $1 million of fixed assets and intends to keep its debt ratio at its historical level of 60%. Payne’s debt interest rate is currently 8%. You are to evaluate three different current asset policies: (1) a restricted policy in which current assets are 45% of projected sales, (2) a moderate policy with 50% of sales tied up in current assets, and (3) a relaxed policy requiring current assets of 60% of sales. Earnings before interest and taxes are expected to be 12% of sales. Payne’s tax rate is 40%. What is the expected return on equity under each current asset level? In this problem, we have assumed that the level of expected sales is independent of current asset policy. Is this a valid assumption? Why or why not? How would the overall risk of the firm vary under each policy?A company had WACC (weighted average cost of capital) equal to 8. % If the company pays off mortgage bonds with an interest rate of 4% and issues an equal amount of new stock considered to be relatively risky by the market, which of the following is true? a. residual income will increase. b. ROI will decrease. c. WACC will increase. d. WACC will decrease.Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Stricklers sales last year were 3,250,000 (all on credit), and its net profit margin was 7%. Its inventory turnover was 6.0 times during the year, and its DSO was 41 days. Its annual cost of goods sold was 1,800,000. The firm had fixed assets totaling 535,000. Stricklers payables deferral period is 45 days. a. Calculate Stricklers cash conversion cycle. b. Assuming Strickler holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. c. Suppose Stricklers managers believe the annual inventory turnover can be raised to 9 times without affecting sale or profit margins. What would Stricklers cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 9 for the year?
- A firm wishes to maintain an internal growth rate of 7.7 percent and a dividend payout ratio of 35 percent. The current profit margin is 6.1 percent, and the firm uses no external financing sources. What must total asset turnover be?A firm wishes to maintain an internal growth rate of 6.4 percent and a dividend payout ratio of 25 percent. The current profit margin is 5.7 percent, and the firm uses no external financing sources. What must total asset turnover be? Internal growth rate 6.40% Payout ratio 25% Profit margin 5.70% Calculate Plowback ratio Return on assets Total asset turnoverConsider a retail firm with a net profit margin of 3.36%, a total asset turnover of 1.88, total assets of $45.5 million, and a book value of equity of $17.6 million. a. What is the firm's current ROE? b. If the firm increased its net profit margin to 4.27%, what would be its ROE? c. If, in addition, the firm increased its revenues by 18% (maintaining this higher profit margin and without changing its assets or liabilities), what would be its ROE?
- Tinsley, Incorporated, wishes to maintain a growth rate of 17 percent per year and a debt-equity ratio of 1.1. The profit margin is 4.4 percent, and total asset turnover is constant at 1.04. What is the dividend payout ratio? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. What is the maximum sustainable growth rate for this company? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.Consider a retail firm with a net profit margin of 3.93 %, a total asset turnover of 1.87, total assets of $42.3 million, and a book value of equity of $18.6 million.a. What is the firm's current ROE?b. If the firm increased its net profit margin to 4.58 %, what would be its ROE?c. If, in addition, the firm increased its revenues by 19 % (maintaining this higher profit margin and without changing its assets or liabilities), what would be its ROE?Consider a retail firm with a net profit margin of 3.94%, a total asset turnover of 1.84, total assets of $44.9 million, and a book value of equity of $18.3 million. a. What is the firm's current ROE? b. If the firm increased its net profit margin to 4.83%, what would be its ROE? c. If, in addition, the firm increased its revenues by 23% (maintaining this higher profit margin and without changing its assets or liabilities), what would be its ROE? **round to one decimal place**
- Consider a retail firm with a net profit margin of 3.15%, a total asset turnover of 1.82, total assets of $44.9 million, and a book value of equity of $17.4 million. c. If, in addition, the firm increased its revenues by 16% (maintaining this higher profit margin and without changing its assets or liabilities), what would be its ROE?Using the Du Pont method, evaluate the effects of the following relationships for the Butters Corporation. a. Butters Corporation has a profit margin of 5 percent and its return on assets (investment) is 22.5 percent. What is its assets turnover? (Round your answer to 2 decimal places.) b. If the Butters Corporation has a debt-to-total-assets ratio of 55.00 percent, what would the firm's return on equity be? (Input your answer as a percent rounded to 2 decimal places.) c. What would happen to return on equity if the debt-to-total-assets ratio decreased to 50.00 percent? (Input your answer as a percent rounded to 2 decimal places.)A company has a required return of 12%, a profit margin of 4%, a D/E ratio of 0.5 and total asset turnover of 2. Annual dividends last year were $2.00. A) The company has a dividend payout ratio of 20%; calculate the price and forward P/E ratio. B) If the company would have changed its dividend payout ratio to 60%, what would happen to the price and forward P/E ratio? C) What variables are critical to determine if they should increase or decrease their dividend payout ratio? (Hint be specific what variables do you need to know.)