Delay HModeSoutheast Gystems has the following balance sheet and the income statement. The company had 10 million shares of common stock outstanding and its market price of the common stock was $78 at theend of 2014. Make sure the unit is in million dollars.(unit: $ in millions)Southeast SystemsBalance Sheets2013201420132014Cash$50$100 Accounts payable$450$500Accounts receivable600700Notes payable300400Inventory500550 Long-term debt650650Net fixed assets1,0001,000 Common equity300300Retained earnings450500Total Assets$2,350 Total Liabilities &Owner's Equity$2,150$2,150$2,350Income Statement2014$2,370SalesCost of goods sold2,070Depreciation200ЕBIT100Interest expenses20Taxable income80Таxes28$52Net incomeDividends$2(1) What is the net cash flow from operating activity for 2014?(2) What is the net cash flow from investment activity for 2014? Assume depreciation= write-offs of fixed assets.Type here to search30°F ClearhpII

The Cash Flow Statement shows inflows of cash and outflow of cash of a business organization on…

outheast Oystems has the following balance sheet and the income statement. The company had 10 million shares of common stock outstanding and its market price of the common stock was $78 nd of 2014. Make sure the unit is in million dollars. (unit: $ in Southeast Systems Balance Sheets 2013 2014 2013 2014 $100 Accounts payable 700 Notes payable Cash $50 $450 $500 Accounts receivable 600 300 400 Inventory 500 550 Long-term debt 1.000 Common equity Retained earnings 650 650 Net fixed assets 1.000 300 300 450 500 Total Assets $2,150 $2,350 Total Liabilities & Owner's Equity $2,150 $2,350 Income Statement 2014 $2,370 Sales Cost of goods sold 2,070 Depreciation 200 EBIT 100 Interest expenses 20 Taxable income 80 Taxes 28 $52 Net income Dividends $2 (1) What is the net cash flow from operating activity for 2014? (2) What is the net cash flow from investment activity for 2014? Assume depreciation = write-offs of fixed assets.

outheast Oystems has the following balance sheet and the income statement. The company had 10 million shares of common stock outstanding and its market price of the common stock was $78 nd of 2014. Make sure the unit is in million dollars. (unit: $ in Southeast Systems Balance Sheets 2013 2014 2013 2014 $100 Accounts payable 700 Notes payable Cash $50 $450 $500 Accounts receivable 600 300 400 Inventory 500 550 Long-term debt 1.000 Common equity Retained earnings 650 650 Net fixed assets 1.000 300 300 450 500 Total Assets $2,150 $2,350 Total Liabilities & Owner's Equity $2,150 $2,350 Income Statement 2014 $2,370 Sales Cost of goods sold 2,070 Depreciation 200 EBIT 100 Interest expenses 20 Taxable income 80 Taxes 28 $52 Net income Dividends $2 (1) What is the net cash flow from operating activity for 2014? (2) What is the net cash flow from investment activity for 2014? Assume depreciation = write-offs of fixed assets.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 99.4C

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CALCULATING THE WACC Here is the condensed 2016 balance sheet for Skye Computer Company (in thousands of dollars): 2016 Current assets 2,000 Net fixed assets 3,000 Total assets 5,000 Accounts payable and accruals 900 Short-term debt 100 Long-term debt 1,100 Preferred stock (10,000 shares) 250 Common stock (50,000 shares) 1.300 Retained earnings 1,350 Total common equity 52,650 Total liabilities and equity 5,000 Skyes earnings per share last year were 3.20. The common stock sells for 55.00, Last year's dividend (Do) was 2.10, and a flotation cost of 10% would be required to sell new common stock. Security analysts are projecting that the common dividend will grow at an annual rate of 9%. Skye's preferred stock pays a dividend of 3.30 per share, and its preferred stock sells for 30.00 per share. The firm's before-tax cost of debt is 10%, and its marginal tax rate is 35%. The firms currently outstanding 10% annual coupon rate, long-term debt sells at par value. The market risk premium is 5%, the risk-free rate is 6%, and Skyes beta is 1.516. The firms total debt, which is the sum of the companys short-term debt and Long-term debt, equals 1.2 million. a. Calculate the cost of each capital component, that is, the after-tax cost of debt, the cost of preferred stock, the cost of equity from retained earnings, and the cost of newly issued common stock. Use the DCF method to find the cost of common equity. b. Now calculate the cost of common equity from retained earnings, using the CAPM method. c. What is the cost of new common stock based on the CAPM? (Hint: Find the difference between rc and rs. as determined by the DCF method, and add that differential to the CAPM value for rs) d. If Skye continues to use the same market-value capital structure, what is the firms WACC assuming that (1) it uses only retained earnings for equity? (2) If it expands so rapidly that it must issue new common stock?
Rebert Inc. showed the following balances for last year: Reberts net income for last year was 3,182,000. Refer to the information for Rebert Inc. above. Also, assume that the dividends paid to common stockholders for last year were 2,600,000 and that the market price per share of common stock is 51.50. Required: 1. Compute the dividends per share. 2. Compute the dividend yield. (Note: Round to two decimal places.) 3. Compute the dividend payout ratio. (Note: Round to two decimal places.)
Rebert Inc. showed the following balances for last year: Reberts net income for last year was 3,182,000. Refer to the information for Rebert Inc. above. Also, assume that the market price per share for Rebert is 51.50. Required: 1. Compute the dollar amount of preferred dividends. 2. Compute the number of common shares. 3. Compute earnings per share. (Note: Round to two decimals.) 4. Compute the price-earnings ratio. (Note: Round to the nearest whole number.)
DIVIDENDS Brooks sporting Inc. is prepared to report the following 2016 income statement (shown in thousands of dollars). Sales 15,300 Operating costs including depreciation 12,240 EBIT 3,060 Interest 330 EBT 2,730 Taxes (40%) 1,092 Net income 1,638 Prior to reporting this income statement, the company wants to determine its annual dividend. The company has 320,000 shares of common stock outstanding, and its stock trades at 37 per share. a. The company had a 25% dividend payout ratio in 2015. If Brooks wants to maintain this payout ratio in 2016, what will be its per-share dividend in 2016? b. If the company maintains this 25% payout ratio, what will be the current dividend yield on the companys stock? c. The company reported net income of 1.35 million in 2015. Assume that the number of shares outstanding has remained constant. What was the companys per-share dividend in 2015? d. As an alternative to maintaining the same dividend payout ratio. Brooks is considering maintaining the same per-share dividend in 2016 that it paid in 2015. If it chooses this policy, what will be the companys dividend payout ratio in 2016? e. Assume that the company is interested in dramatically expanding its operations and that this expansion will require significant amounts of capital. The company would like to avoid transactions costs involved in issuing new equity. Given this scenario, would it make more sense for the company to maintain a constant dividend payout ratio or to maintain the same per-share dividend? Explain.
During 20X2, Evans Company had the following transactions: a. Cash dividends of 6,000 were paid. b. Equipment was sold for 2,880. It had an original cost of 10,800 and a book value of 5,400. The loss is included in operating expenses. c. Land with a fair market value of 15,000 was acquired by issuing common stock with a par value of 3,600. d. One thousand shares of preferred stock (no par) were sold for 4.20 per share. Evans provided the following income statement (for 20X2) and comparative balance sheets: Required: Prepare a worksheet for Evans Company.
Southeastern IT Systems has the following balance sheet and the income statement. The company had 10 million shares of common stock outstanding and its market price of the common stock was $380.25 at the end of 2014. Make sure the unit is in million dollars. Make sure the unit is in million dollars. (unit: $ in millions) Southeastern IT Systems Balance Sheets 2013 2014 2013 2014 Cash $1,000 $1,200 Accounts payable $800 $850 Accounts receivable 6,500 7,500 Notes payable 7,500 8,000 Inventory 1,500 2,000 Current liabilities 8,300 8,850 Current assets 9,000 10,700 Long-term debt 1,000 1,000 Net fixed assets 3,000 3,500 Common equity 500 500 Retained earnings 2,200 3,850 Total Assets $12,000 $14,200 Total Liabilities & Owner’s Equity $12,000 $14,200 Income Statement 2014 Net sales $15,000 Cost of goods sold 10,000…
Southeastern IT Systems has the following balance sheet and the income statement. The company had 10 million shares of common stock outstanding and its market price of the common stock was $380.25 at the end of 2014. Make sure the unit is in million dollars. Make sure the unit is in million dollars. (unit: $ in millions) Southeastern IT Systems Balance Sheets 2013 2014 2013 2014 Cash $1,000 $1,200 Accounts payable $800 $850 Accounts receivable 6,500 7,500 Notes payable 7,500 8,000 Inventory 1,500 2,000 Current liabilities 8,300 8,850 Current assets 9,000 10,700 Long-term debt 1,000 1,000 Net fixed assets 3,000 3,500 Common equity 500 500 Retained earnings 2,200 3,850 Total Assets $12,000 $14,200 Total Liabilities & Owner’s Equity $12,000 $14,200 Income Statement 2014 Net sales $15,000 Cost of goods sold 10,000…
Southeast Systems has the following balance sheet and the income statement. The company had 10 million shares of common stock outstanding and its market price of the common stock was $78 at the end of 2014. Make sure the unit is in million dollars. (unit: $ in millions) Southeast Systems Balance Sheets 2013 2014 2013 2014 Cash $50 $100 Accounts payable $450 $500 Accounts receivable 600 700 Notes payable 300 400 Inventory 500 550 Long-term debt 650 650 Net fixed assets 1,000 1,000 Common equity 300 300 Retained earnings 450 500 Total Assets $2,150 $2,350 Total Liabilities & Owner’s Equity $2,150 $2,350 Income Statement 2014 Sales $2,370 Cost of goods sold 2,070 Depreciation 200 EBIT 100 Interest expenses 20 Taxable income 80 Taxes 28 Net income $52 Dividends $2 What are the values of the (net)…
Southeast Systems has the following balance sheet and the income statement. The company had 10 million shares of common stock outstanding and its market price of the common stock was $78 at the end of 2014. Make sure the unit is in million dollars. (unit: $ in millions) Southeast Systems Balance Sheets 2013 2014 2013 2014 Cash $50 $100 Accounts payable $450 $500 Accounts receivable 600 700 Notes payable 300 400 Inventory 500 550 Long-term debt 650 650 Net fixed assets 1,000 1,000 Common equity 300 300 Retained earnings 450 500 Total Assets $2,150 $2,350 Total Liabilities & Owner’s Equity $2,150 $2,350 Income Statement 2014 Sales $2,370 Cost of goods sold 2,070 Depreciation 200 EBIT 100 Interest expenses 20 Taxable income 80 Taxes 28 Net income $52 Dividends $2 What are the values of the D/E…
Southeast Systems has the following balance sheet and the income statement. The company had 10 million shares of common stock outstanding and its market price of the common stock was $78 at the end of 2014. Make sure the unit is in million dollars. (unit: $ in millions) Southeast Systems Balance Sheets 2013 2014 2013 2014 Cash $50 $100 Accounts payable $450 $500 Accounts receivable 600 700 Notes payable 300 400 Inventory 500 550 Long-term debt 650 650 Net fixed assets 1,000 1,000 Common equity 300 300 Retained earnings 450 500 Total Assets $2,150 $2,350 Total Liabilities & Owner’s Equity $2,150 $2,350 Income Statement 2014 Sales $2,370 Cost of goods sold 2,070 Depreciation 200 EBIT 100 Interest expenses 20 Taxable income 80 Taxes 28 Net income $52 Dividends $2 What are the values of the current…
Southeast Systems has the following balance sheet and the income statement. The company had 10 million shares of common stock outstanding and its market price of the common stock was $78 at the end of 2014. Make sure the unit is in million dollars. (unit: $ in millions) Southeast Systems Balance Sheets 2013 2014 2013 2014 Cash $50 $100 Accounts payable $450 $500 Accounts receivable 600 700 Notes payable 300 400 Inventory 500 550 Long-term debt 650 650 Net fixed assets 1,000 1,000 Common equity 300 300 Retained earnings 450 500 Total Assets $2,150 $2,350 Total Liabilities & Owner’s Equity $2,150 $2,350 Income Statement 2014 Sales $2,370 Cost of goods sold 2,070 Depreciation 200 EBIT 100 Interest expenses 20 Taxable income 80 Taxes 28 Net income $52 Dividends $2 (1) What is the value of the days…