nnual report of 2019 which shows an EBITDA of P5,000,000 and a total liability of P15,550,000. Evidently, the sales grew by 12% annually with a direct effect on the growth of free cash flow of 12% yearly. Last year, the free cash flow was reported to be P3,500,000. The weighted average cost of capital is 10%. Using the financial model, how much is the value of the eq
Q: 1. Although Mutual funds and Hedge funds are regulated, they are not traded on exchanges * O True O ...
A: Mutual funds and hedge funds are both managed portfolios made up of pooled money with the purpose of...
Q: Marion's grandfather's will established a trust that will pay her $1,800 every three months for 12 y...
A: A cashflow of a certain amount today is more valuable than the same cashflow after some years. This ...
Q: Yummy Food is expanding its business and wants to open a new facility to make frozen lasagna, which ...
A: Concept Break even lease rental is rental at which lessee is indifferent to choice between lease fin...
Q: Find the interest rate compounded quarterly on 9,500 whose periodic deposit is 300 every end of thre...
A: Total amount is 9500 Deposit per quater is 300 Time period is 6 years and 9 months To Find: Interes...
Q: Assume Highline Company has just paid an annual dividend of $0.98. Analysts are predicting an 11.2% ...
A: Answer - Computation of Value of Highline's stock - Year Dividend PV @ 9.2% Present Value ...
Q: Intel Inc is looking to acquire a new equipment for a project that will last for eight years. The af...
A: Explanation to lease or buy option : In the process of evaluating a lease or a buy decision, the cas...
Q: What effect will disinflation following a highly inflationary period have on the reported income of ...
A: Disinflation is the reduction or lowering of the pace of inflation. In other words, in situation of ...
Q: 3. Orange Company recently reported $10,500 of sales, $4,000 of operating costs other than depreciat...
A: As per Bartleby Honor Code, when multiple questions are asked, the expert is required only to solve ...
Q: A project has the following cash flows. What is the internal rate of return? Years Cash flow -$46.80...
A: Solution:- Internal Rate of Return (IRR) is the rate of return which the bank is yielding. At IRR, N...
Q: Last year, Joan purchased a $1,000 face value corporate bond with an 9% annual coupon rate and a 10-...
A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only o...
Q: average price-earnings ratios of the small firms in textile industry is 12.50. On the other hand, Ep...
A: P/E ratio is most widely used as ratio for comparison between the value of shares with industry aver...
Q: How much should be placed in this account at the end of each week if the annual interest rate is 3.8...
A: Time value of money (TVM) is used to measure the value of money at different point of time in the fu...
Q: The management of Russel Ltd. is trying to decide whether it can increase its dividend. During the c...
A: The net cash flow (FCF) represents the cash generated by a company after considering cash outflows t...
Q: What is the net income for the BlueDragon cormpany given the following list of accounting iterns? no...
A: Solution:- Net income means the net profit available to a corporation after taking into consideratio...
Q: 3. Refer to the following table of cash flows: End of Year (EOY) Cash Flow 8 12 16 P5,000 P5,000 P5,...
A: Annual worth assessments are substantially the same as present worth comparisons, with the exception...
Q: 16. LSP Manufacturing recently reported Net income of $350,000, Interest expense $112,000. It has RO...
A: Net income = $350,000 Interest expenses = $112,000 ROA = 9% Assets = Net income/ROA = 35...
Q: A 0.235 cu. m, packed bed reactor costs $7.000 in 2002. What is the estimated cost of a 0.336 cu. m....
A: On a balance sheet of a company, a capitalised cost is an item that is applied to the cost base of a...
Q: 15. Zoom has Quick ratio of 2x, sales of $120,000, in addition it has current assets of $170,000 and...
A: Quick ratio = 2x Current assets = $170,000 Current liabilities = $50,000 Inventory = Current assets-...
Q: The present value of Rp100 million in three months is Rp97 million. Compute the simple interest rate...
A: Present Value: The present value is the value of cash flow stream or the fixed lump sum amount at t...
Q: 8. The December 31, 2019 income statement for App Inc. reported $3.5 million of net income, and its ...
A: The statement of retained earnings is one of the financial statements prepared by a firm that reconc...
Q: Warren Buffett: How Most People Should Invest in 2021 explain the statement given
A: The statement was issued by Buffet in 2021 Berkshire Hathaway annual meeting. In the annual meeting ...
Q: Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of Microsoft com...
A: Date Purchased Shares Basis Cost per Shares 7/10/2011 580 $27,840 $48.00 4/20/2012 480 $25,824 $...
Q: ABD Company's manufacturing overhead is 20% of its total conversion costs. If direct labor is PhP2,2...
A: Manufacturing overhead is referred as an indirect costs, which incurs at the time of production proc...
Q: 2. ABC company sells an old piece of equipment for $5,000 cash. At the same moment, it buys a new tr...
A: Sale of equipment = $5000 Buy of new truck = $25000
Q: You put 280,000 dollars in a bank which gives you 0.75% interest compounded daily. If you leave that...
A: The amount of interest earned can be computed with the help of future value function
Q: 18. A man will deposit 200 with a savings bank at the beginning of each 3 months for 9 years. If the...
A: Question 18 pertains to annuity due. Annuity due is that annuity in which payments are made at the b...
Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery w...
A: Cashflows means movement of cash it may be inflow or outflow. For the purposes of capital decision,...
Q: (a) Briefly explain why information asymmetry can widen the effective bid ask spread of a stock.
A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one...
Q: You purchased 100 shares in a real estate investment trust for $50 a share. The trust paid the follo...
A: Annualized returns is return earned over the period of single year by holding the investment.
Q: 3. Although Mutual funds and Hedge funds are traded on exchanges regulated, they are not
A: Both hedge funds and mutual funds are made of pooled funds and have portfolios that need to be manag...
Q: Assume that the interest rate on 1 year t-bill in Canada is .60% and the interest rate for similar p...
A: Time Period = 1 Year Interest Rate of Canada = 0.60% Interest Rate of US = 1%
Q: XYZ inc. considers an investment project that requires $200,000 in new equipment and $30,000 in extr...
A: Cash flow for a project is calculated after adjusting all the operating expenses and adding back the...
Q: A mechanical engineer designs and sells equipment that automates manual labor processes. He is offer...
A: The defender is the old equipment or product currently used by the company and might use for more se...
Q: Emily Dao, 27, just received a promotion at work that increased her annual salary to $37,000. She is...
A: Concept. Present value is calculated by formula Pv = Fv ÷[ ( 1+ r) n ] Where Pv = present value Fv ...
Q: Jana, now 23 years old, is a grade school teacher in Batangas City. She has been invited by her high...
A: A deposit or payment of equal amount of money at equal intervals of time is called annuity. Insuranc...
Q: Isabella purchased $20,000 worth of 26-week T-Bills for $19,700. What will be the rate of return on ...
A: Initial investment (P) =$19,700 Maturity value(S)=$20,000 since maturity period is 26 week= 26*7=182...
Q: If the sum of P12,000.00 is deposited in an account earning interest rate of 9% compounded quarterly...
A: Future Value: The future value is the amount that will be received at the end of a certain period. T...
Q: You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner. The s...
A: Tax shield on depreciation =(6,300,000/4)*(0.36) 567000 After tax lease payment = 1745000*(1-0.36)...
Q: рауm parents agree to lend her money at an annual rate of 5%, charged as sir interest. They lend her...
A: Simple interest is plain simple and there is no interest on interest and so there is no compounding ...
Q: Which arrangement of the different modes of financing appropriately reflects the related cost of cap...
A: Highest cost capital modes of fiannacing is cost of equity.
Q: On December 31, 2020, Dow Steel Corporation had 740,000 shares of common stock and 314,000 shares of...
A: Dow's basic earnings per share Dow's diluted earnings per share
Q: You sold a stock for $75 that you purchased eleven years earlier for $40. What was the holding perio...
A: The required return on the stock represents the total return earned on the stock. This return is con...
Q: Explain the term financial management in detail, and discuss why financial managers need to understa...
A: Here in this question , we have to explain the meaning of Financial management, its importance to un...
Q: PROBLEM 1: A man borrowed P3 000 to be paid after 18 months with interest at 12% compounded semi-ann...
A: First borrowed amount (B1) = P 3000 after 18 months (3 semiannual periods) n1 = 3 semiannual periods...
Q: Car loan Planning to give his son a car as a gift when he graduates from college 2 years from now, A...
A: Present Value: The present value is the value of cash flow stream or the fixed lump sum amount at t...
Q: A $1,000 bond has a 5 percent coupon and currently sells for $890. The bond matures after four years...
A: Bonds is an investment security in which investors invest amount in exchange of regular interest rec...
Q: Supposing we the contract entered in is at the price of $285. We would like to evaluate our position...
A: Here, Spot price = $285. Time of contract = 4 months Forward price = $293.15. To Find: Gain or loss ...
Q: annually. Payments will be made at the end of each year. Find the total value of the annuity in 16 y...
A: Future Value of Annuity: It represents the future worth of the present annuity cash flow stream. It...
Q: 1. Fattal Inc. recently reported $120,000 of sales, $75,500 of operating costs other than depreciati...
A: The statement of profit or loss of a company shows all the income earned and expenses incurred by a ...
Q: A bank uses a certain form at a uniform rate of 60 pads per week during each of the 52 weeks per Thi...
A: Since you have posted a multiple question therefore we will be solving first question only. However,...
The annual report of 2019 which shows an EBITDA of P5,000,000 and a total liability of P15,550,000. Evidently, the sales grew by 12% annually with a direct effect on the growth of
Step by step
Solved in 2 steps with 2 images
- Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%? What are the projected sales in Years 1 and 2? What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2? What is the projected FCF for Year 2?LONG-TERM FINANCING NEEDED At year-end 2019, total assets for Arrington Inc. were 1.8 million and accounts payable were 450,000. Sales, which in 2019 were 3.0 million, are expected to increase by 25% in 2020. Total assets and accounts payable are proportional to sales, and that relationship will be maintained; that is, they will grow at the same rate as sales. Arrington typically uses no current liabilities other than accounts payable. Common stock amounted to 500,000 in 2019, and retained earnings were 475,000. Arrington plans to sell new common stock in the amount of 130,000. The firms profit margin on sates is 5%; 35% of earnings will be retained. a. What were Arringtons total liabilities in 2019? b. How much new long-term debt financing will be needed in 2020? (Hint: AFN - New stock = New long-term debt.)Broussard Skateboard’s sales are expected to increase by 15% from $8 million in 2018 to $9.2 million in 2019. Its assets totaled $5 million at the end of 2018. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2018, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 40%. Use the AFN equation to forecast Broussard’s additional funds needed for the coming year.
- Smiley Corporations current sales and partial balance sheet are shown here. Sales are expected to grow by 10% next year. Assuming no change in operations from this year to next year, what are the projected spontaneous liabilities?Long-Term Financing Needed At year-end 2018, Wallace Landscapings total assets were 2.17 million, and its accounts payable were 560,000. Sales, which in 2018 were 3.5 million, are expected to increase by 35% in 2019. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to 625,000 in 2018, and retained earnings were 395,000. Wallace has arranged to sell 195,000 of new common stock in 2019 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2019. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 5%, and 45% of earnings will be paid out as dividends. a. What were Wallaces total long-term debt and total liabilities in 2018? b. How much new long-term debt financing will be needed in 2019? [Hint: AFN New stock = New long-term debt.)JenBritt Incorporated had a free cash flow (FCF) of $80 million in 2019. The firm projects FCF of $200 million in 2020 and $500 million in 2021. FCF is expected to grow at a con- stant rate of 4% in 2022 and thereafter. The weighted average cost of capital is 9%. What is the current (i.e., beginning of 2020) value of operations?
- Pearl Corp. is expected to have an EBIT of $2,900,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $160,000, $130,000, and $170,000, respectively. All are expected to grow at 19 percent per year for four years. The company currently has $15,000,000 in debt and 1,300,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3 percent indefinitely. The company’s WACC is 8.5 percent and the tax rate is 21 percent. What is the price per share of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)On December 2020, the company Psi SA is financed with debt and equity. This company has a cost of capital (WACC) equal to 12%. Also on December 2020, the company presented an EBIT equal to 1,500€, 350€ of amortization and 150€ of depreciation, and 300€ of corporate taxes. The company invested in fixed assets for 500€, and its working capital increased in 50€. After a decade of rapid growth, the cash flows in the last two years increased only at a constant rate of 2%, and it is expected that the cash flows will remain growing at this level in the future. Determine the value of the firm on December 2020.Assume that today is December 31, 2018, and that the following information applies to Abner Airlines: After-tax operating income [EBIT(1 - T)] for 2019 is expected to be $500 million. The depreciation expense for 2019 is expected to be $180 million. The capital expenditures for 2019 are expected to be $400 million. No change is expected in net operating working capital. The free cash flow is expected to grow at a constant rate of 6% per year. The required return on equity is 15%. The WACC is 10%. The firm has $200 million of non-operating assets. The market value of the company's debt is $3.096 billion. 340 million shares of stock are outstanding. Using the corporate valuation model approach, what should be the company's stock price today? Do not round intermediate calculations. Round your answer to the nearest cent. $
- Franktown Motors is expected to have an EBIT of $2.2 million next year. Depreciation, the increase in net working capital, and capital spending are expected to be $158,000, $92,000, and $114,000, respectively. All are expected to grow at 15 percent per year for four years. The firm currently has $12 million in debt and 750,000 shares outstanding. After year 5, the adjusted cash flow from assets is expected to grow at 2.5 percent indefinitely. The company’s WACC is 8.7 percent and the tax rate is 34 percent. What is the price per share of the company’s stock? $27.82 $29.34 $22.07 $26.12 $16.47Derry Corporation is expected to have an EBIT of $2,600,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $195,000, $100,000, and $200,000, respectively. All are expected to grow at 17 percent per year for four years. The company currently has $14,500,000 in debt and 810,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 2.3 percent, indefinitely. The company’s WACC is 8.6 percent and the tax rate is 23 percent. What is the price per share of the company's stock? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.Dewey Corp. is expected to have an EBIT of $2,850,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $220,000, $125,000, and $225,000, respectively. All are expected to grow at 16 percent per year for four years. The company currently has $17,000,000 in debt and 835,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 2.8 percent indefinitely. The company’s WACC is 9.2 percent and the tax rate is 23 percent. What is the price per share of the company's stock?