Picollo had after tax earnings of P5,000,000 in 2014. The company needs P5,000,000 for new investments and plans to finance 70% of those investments with debt. If Picollo follows a residual a dividend policy, what total dividend will be paid? *
Q: How much can be paid in scholarship at the beginning of each month if $200000 is deposited in a trus...
A: The amount to be paid monthly can be calculated from the function of present value of annuity due
Q: Dick Eckel recently set up a TDA to save for his retirement. He arranged to have $135 taken out of e...
A: Future value is compounding all intermediate cashflows to future point of time. It helps to ascertai...
Q: How much must Melissa deposit at the beginning of every three months for 5 years into an account at ...
A: Solution:- When an equal amount is deposited each period at the beginning of each period, it is call...
Q: 5. Determine the number of days of the loan. Loan Date Due Date Number of Days March 8 July 22
A: Loan date = March 8 Due date = July 22
Q: ) skimming P) pretexting c) phishing d) fraud
A: There are many methods of doing crimes related to the money and finance and these are increasing day...
Q: E 14956.75 7. Edward Cariaga loans P35,300 at 6½% simple interest, how long it will take him to get ...
A: Simple Interest is the method in which we calculate the interest on a specific principal amount at a...
Q: What is the current price of a share of stock when the current dividend is P5, the growth rate is 5%...
A: The current price of the stock can be estimated with the help of dividend discount model
Q: Ten years ago, when Franco was still a college student, he deposited 10,000 in a bank. The bank's ra...
A: Amount deposited 10 years ago (X) = 10000 r = 2% per annum = 0.5% per quarter n = 10 years = 40 quar...
Q: National Co. forecasts that its earnings per share will be P4.00 this year. The company has 500,000...
A: The capital structure of company consists of debt and equity. Dividend are paid out of net income an...
Q: If Marc obtained a business loan of $225,000 at 4.77% compounded semi-annually, how much should he p...
A: Solution:- When a loan is taken, it is either paid back in lump sum mode or installments. In install...
Q: A company has a P1,200 face value bond with 8 years until maturity. The bond possesses a characteris...
A: Approximate Yield to maturity is the rate of return of a bond with an assumption that the bond will ...
Q: The Black-Scholes model is used by Bulldogs Inc. to value call options on the stock of National Inc....
A: There is one popular mathematical model, which is used for calculation of value of call or put optio...
Q: f the firm's dividend policy was to pay P0.25 per share each period except when earnings exceed P1.5...
A: Dividend per share Net earnings or profit of a firm is used to retain in business itself or is distr...
Q: Based on the information provided, the price/earnings multiple for National Co. is closest to
A: Expected EPS = EPS1 = P 5.70 Expected dividend = D1 = P 2.70 Growth rate (g) = 2.75% r = 8.35%
Q: Carry trading is sometimes described as "picking up pennies in front of a steamroller", this is beca...
A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one...
Q: Given: 20,000 shares cumulative preferred stock ($3.5 dividend per share): 40,000 shares common stoc...
A: Preferred stock is the component of share capital that essentially acts as a debt instrument and is ...
Q: A firm has experienced a constant annual rate of dividend growth of 3 percent on its common stock an...
A: The value of stock can be computed by using the dividend growth model
Q: The average return for the line is %. (Enter as a percentage and round to two decimal places.)
A: Average Return: The average return is computed by summing the product of the security probability a...
Q: Far value is $2,000,000 Assume a three-year bond with an 8% annual coupon. If rates change from 8% t...
A: Par value = $2000,000 Coupon rate = 8% Annual coupon amount = 2000,000*0.08 = $160,000 Years to matu...
Q: Consider 10.0 percent Swiss franc/U.S. dollar dual-currency bonds that pay $666.67 at maturity per S...
A: Implicit exchange rate = Swiss franc/U.S. dollar dual-currency bonds
Q: A $100,000 interest rate swap has a remaining life of 10 months. Under the terms of the swap, six-mo...
A: A fixed-floating swap is a contract whereby both parties agree to swap exchange rate, interest rate ...
Q: A five year P1,000 par value bond pays a 5% annual coupon. Given a YTM of 7%, what is the price of t...
A: The present discounted value of a bond's future cash flow is generally known as the bond price. The ...
Q: The current beta for The Garner Company is 1.6. The risk-free rate of return is 3%, whereas the mark...
A: Current beta = 1.6 Risk free rate (Rf) = 3% Market risk premium (Rm - Rf) = 7%
Q: Why do short-term debt securities issued by private companies generally offer higher yields than tre...
A: Short term debt securities are referred as the securities, which are issued within 12 months to the ...
Q: The following are taken from the financial statements of Curry Company as of December 2021. Assets: ...
A: Cash = 341,600 Accounts receivable = 200,000 Inventory = 308,400 Notes payable = 280,000 Accounts pa...
Q: what is the estimated cost of ordinary equity?
A: Cost of ordinary equity refers to the cost incurred by the company for issuing new ordinary equity. ...
Q: a) Calculate total current assets. Total Current Assets: $ b) Calculate total lorg-term assets. Tota...
A: Current assets are the assets used by the company to pay its current liabilities. These assets are a...
Q: Why dividen yield ratio increase while dividend payout ratio decrease? please explain in terms of in...
A: Dividend Yield ratio: It is the ratio will be used to calculate the ratio of dividen...
Q: 4. I just began working and was advised by an insurance agent to invest for retirement. An ordinary ...
A: Since you have asked multiple questions, we will solve the first question for you. If you want any s...
Q: Company XYZ does not currently pay a dividend. However, their earnings have been growing at a very h...
A: Given:- First Dividend$ 6.9 per share The dividend is then expected to grow at 20 % per year for 6...
Q: Just in preparation for his retirement, a man intended to invest today into a bank with an interest ...
A: Nominal interest rate is interest without considering the impact of the compounding and is less annu...
Q: Altoona Company is considering replacing a machine with a book value of P200,000, a remaining useful...
A: Given: Cost of machine = P320,000 Life = 4 Savings operating cost = P100,000 Tax = 40%
Q: Please show full working a. What is the portfolio mean & variance (arithmetic only): i. For an equal...
A: Given: Date YUM ZTS AAPL Market 31/01/18 84.59 76.73 87.3 1251.42 28/02/18 81.38 80.86 75.74 ...
Q: Bryce and David plan to purchase a home for $176,000. They will pay 20% down and finance the remaind...
A: Down payment = 20% Loan (L) = 80% of $176000 = $140800 n = 15 years = 180 months r = 8.2% per annum ...
Q: Raglan Stores PLC has grown rapidly since its stock market flotation five years ago. Despite its rap...
A: Given that Company's share = 80∈ million Outstanding Shares=200∈ million EPS (Earning per Share)=4...
Q: t is the current price of a share of stock when the current dividend is P5, the growth rate is 5%, a...
A: Current price of stock can be found out from dividend ,growth rate and required rate by using consta...
Q: PROBLEM: If Php 6,000 must accumulate for 12 years at 12 % compounded quarterly, then find the compo...
A: Investment amount (PV) = 6000 Period = 12 Years Quarterly period (n) = 12*4 = 48 Interest rate = 12%...
Q: Franco is considering investing P18,500 in an investment that will have a maturity value of P32,500 ...
A: Investment amount (P) = P18,500 Maturity value (F) = P32,500 Period = 8 Years Monthly period (n) = 8...
Q: 6. Bonds earn dividends. 7. Dividends are always declared regularly 8. Stocks are generally riskier ...
A: 6. Bonds are the securities issued by the company that pays the regular coupon payments and matures ...
Q: True or False. 1. Allocating funds is the same as the actual distribution of funds 2. Utilization ...
A: Finance is the blood of the business. Without funds, no business can survive in this competitive wor...
Q: Halliford Corporation expects to have earnings this coming year of $3.19 per share. Halliford plans ...
A: This is one of the most popular methods for valuation of price of stock by discounting all the futur...
Q: National Co. pays annual dividends of P9 on the cumulative preferred stock. What is the current valu...
A: Annual dividend = P9 Required rate of return = 12%
Q: Phil has systematically contributed $3000 to his RRSP at the beginning of every three months for the...
A: Since you have asked multiple questions, we will solve the first question for you. If you want any s...
Q: You are an investor who is interested in purchasing AC shares which is currently trading at a price ...
A: Intrinsic value of shares means actual value of shares that is being held by the company or the fair...
Q: Tracy wants to have $400,000 when she retires in 40 years' time. How much should she deposit at the ...
A: Payment per period can be calculated using PMT function in excel. PMT(rate, nper, pv, [fv], [type]...
Q: An investor is evaluating the common share of Bulldogs Inc. which has a beta of 1.8. The expected re...
A: Risk free rate = 2% Market return = 8% Beta = 1.8
Q: If the market value of your home is $250000, but the replacement cost of the structure is $190000, h...
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any ...
Q: What other objectives that are important to a public limited company which are in-line with the prim...
A: A PLC denotes a firm that has issued equity to the general public. The purchasers of the shares are ...
Q: A sales engineer claims that his pump is economically justifiable. He says that for a cost of P250,0...
A: A company's main aim is to maximize the wealth of it's shareholders. For this, companies should unde...
Q: As the investment manager, you are faced with the problem of choosing between two investment project...
A: Here,
Step by step
Solved in 2 steps
- Brower Co. is considering the following alternative financing plans: Income tax is estimated at 40% of income. Determine the earnings per share of common stock, assuming that income before bond interest and income tax is 2,000,000.As the chief financial officer of Adirondack Designs, you have the following information: Next year’s expected net income after tax but before new financing $ 51 million Sinking-fund payments due next year on the existing debt $ 26 million Interest due next year on the existing debt $ 21 million Common stock price, per share $ 33.5 Common shares outstanding 31 million Company tax rate 35% Calculate Adirondack’s times-interest-earned ratio for next year assuming the firm raises $61 million of new debt at an interest rate of 2 percent. Calculate Adirondack’s times-burden-covered ratio for next year assuming annual sinking-fund payments on the new debt will equal $3.0 million. Calculate next year’s earnings per share assuming Adirondack raises the $61 million of new debt. Calculate next year’s times-interest-earned ratio, times-burden-covered ratio, and earnings per share if Adirondack sells 2.6 million new shares at $22 a share instead of raising new debt.For 2019, Gourmet Kitchen Products reported $21 million of sales and $17 million of operating costs (including depreciabon). The companx has $14 milion af tatal invested capital, Its after-tax cost of capital is 8 J.b and its federal-plus.state income tax rate was. 25% . What was the firm's economic value added (EvA), that is, how much value did management add to stockholders' wealth during 2019 ? Write out your answer completely. For example, 25 million ahould be entered as 25,000,005 Round your answer to the nearest dollar, if necessary.
- PMF, Inc., can deduct interest expenses next year up to 30% of EBIT. This limit is equally likely to be $15 million, $21 million, or $27 million. Its corporate tax rate is 35%, and investors pay a 20% tax rate on income from equity and a 35% tax rate on interest income. What is the effective tax advantage of debt if PMF has interest expenses of $12 million this coming year? (Round to two decimalplaces.) What is the effective tax advantage of debt for interest expenses in excess of $27 million? (Ignore carryforwards) (Round to two decimalplaces.) What is the expected effective tax advantage of debt for interest expenses between $15 million and $21 million? (Ignore carryforwards) (Round to two decimalplaces.) What level of interest expense provides PMF with the greatest tax benefit? (Round to two decimalplaces.)Poly is planning for P5 million in capital expenditures next year. Poly’s target capital structure consists of 60% debt and 40% equity. If net income next year is P3 million and Poly follows a residual distribution policy with all distributions as dividends, what will be its dividend payout ratio?Kelly Corporation is considering the issuance of either debt or preferred stock to finance the purchase of a facility costing P1.5 million. The interest rate on the debt is 16 percent. Preferred stock has a dividend rate of 12 percent. The tax rate is 46 percent. REQUIREMENTS: 1. What is the annual interest payment? 2. What is the annual dividend payment? 3. What is the required income before interest and taxes to satisfy the dividend requirement??
- Puckett Products is planning for $4 million in capital expenditures next year. Puckett's target capital structure consists of 60% debt and 40% equity. If net income next year is $3 million and Puckett follows a residual distribution policy with all distributions as dividends, what will be its dividend payout ratio? Round your answer to two decimal places.An investor owns a property that produces an NOI of $110,000 and has an annual debt service of $70,000 and the forecast of cost recovery and interest deductions are $38,427 and $58,593 respectively. The investor’s marginal tax rate is 35 percent. The investor’s projected cash flow after taxes is: A. $30,000 B. $35,457 C. $43,256 D. $25,821Hernandez Corporation expects to have the following data during the coming year. What is Hernandez's expected ROE? (Show your work) Assets = $200,000 D/A = 65% EBIT = $25,000 Interest rate = 8% Tax rate = 40%
- Assume that CVC Corp.'s marginal tax rate is 35%, investors in CVC pay a 15% tax rate on income from equity and a 35% tax rate on interest income. CVC is equally likely to have EBIT this coming year of $20 million, $25 million, or $30 million. What is the effective tax advantage of debt if CVC has interest expenses of $8 million this coming year?If for the most recent year, a firm's RNOA is 17.5%, its sales were $2,000,000, its asset turnover is 2.0, its operating liability (OL) balance is $250,000, and its short-term borrowing rate (STBC) is 2.5% after tax, what is its ROOA?Vanderheiden Press Inc. and Herrenhouse PublishingCompany had the following balance sheets as of December 31, 2018 (thousands of dollars): Earnings before interest and taxes for both firms are $30 million, and the effective federalplus-state tax rate is 40%.a. What is the return on equity for each firm if the interest rate on short-term debt is 10%and the rate on long-term debt is 13%?b. Assume that the short-term rate rises to 20%. Although the rate on new long-term debtrises to 16%, the rate on existing long-term debt remains unchanged. What would bethe returns on equity for Vanderheiden Press and Herrenhouse Publishing under theseconditions?c. Which company is in a riskier position? Why?
