The Indy Company experiences the following annual incomes over the last five years: $60,000, $70,000, $110,000, $150,000, $160,000. A firm like Indy Company commands a 13% discount rate and has a long term growth rate of 3% considering the capitalization of earnings method. Using a non-weighted earnings model, what is the approximate value of the firm (rounded)?
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The Indy Company experiences the following annual incomes over the last five years: $60,000, $70,000, $110,000, $150,000, $160,000. A firm like Indy Company commands a 13% discount rate and has a long term growth rate of 3% considering the capitalization of earnings method. Using a non-weighted earnings model, what is the approximate value of the firm (rounded)?
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- Using the AFN formula in financial forecasting approach, Determine the following for Piano Co. given the following accounting information assuming that the firm’s profit margin remains constant and the company is at full capacity. · Sales this year is P6,000,000· Percentage increase projected for next year sales = 20%· Net income this year amounts to P600,000· Retention ratio = 50%· Accounts payable = P1,100,000· Notes payable = P180,000· Accrued expenses = P500,000· Projected excess funds available next year is determined to be P200,000 Questions: 1. Determine the spontaneous liabilities increase. 2. How much is the increase in Retained Earnings? 3. How much is the total assets?Gamgee Company wishes to maintain a growth rate of 11.6 percent per year, a debt- equity ratio of 1.6, and a dividend payout ratio of 25 percent. The ratio of total assets to sales is constant at .88. What profit margin must the firm achieve? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Profit margin 26.17 %ACME Inc. has the following ratios: A0/S0- 1.3; LO/SO-0.40; profit margin-0.14; and the dividend payout ratio- .32, or 32%. Sales last year were $85 million. Assuming that these ratios will remain constant, use the AFN equation to determine the firm's self-supporting growth rate-in other words, the maximum growth rate ACME can achieve without having to employ non-spontaneous external funds. (Equation 9-2, which is 9-1, solving for g)
- 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.)Please answer this question: ABC Corporation has earnings of $2 million. It planned to payout dividends of $1.2 million to shareholders. The company has a historical return on equity of 16%. What is the firm growth rate on earning next year? What is the firm growth in dollars?Assume that your firm has a return on assets of 14.7% , sales of $16,625,000, total assets of $4,750,000, a return on equity of 36.75%, an interest rate on total debt of 10 percent, and a tax rate of 40 percent. Given this information, determine the firm's basic earnings power. (Hint: you may need to work an income statement backwards to get EBIT, in which case you will need to determine the firm's net income or profit, as well as its interest expense on total debt.)
- An analyst is trying to estimate the intrinsic value of VN Co. that has a weighted average cost of capital at 10%. The estimated free cash flows for the company for the following years are: · Year 1 P3,000 · Year 2 P4,000 · Year 3 P5,000 The analyst estimates that after three years, free cash flow will grow at a constant annual percentage of 6%. What is the total intrinsic value of the company’s common stock if combined debt and preferred stock has a P25,000 market value? A. 98,556 B. 109,339 C. 78,310 D. 84,339A financial analyst wants to compute a company's weighted average cost of capital (WACC) using the dividend discount model. The company has a before-tax cost of new debt of 9%, tax rate of 37.5%, target debt-to-equity ratio of 0.76, current stock price of $74, estimated dividend growth rate of 7% and will pay a dividend of $3.2 next year. What is the company’s WACC A. 8 percent. B. 9 percent. C. 10 percent. D. 11 percent.YiYu Manufacturer wishes to maintain a growth rate of 6 percent a year, a debt-equity ratio of 0.45, and a dividend payout ratio of 30 percent. The ratio of total assets to sales is constant at 1.25. Calculate the profit margin the firm must achieve.
- Suppose that a dividend of $ 3.25 per year was paid in the past period (t-1) and that the company has a constant growth of 4.5%. Its required yield is 12%. What is the maximum price you would pay for the share of this company?Ramble On Co. wishes to maintain a growth rate of 10.4 percent per year, a debt-equity ratio of 1.0, and a dividend payout ratio of 15 percent. The ratio of total assets to sales is constant at .82. What profit margin must the firm achieve? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Profit margin % 8.26Forward Inc. just reported annual earnings of $1 per share this year. The firm's ROE is 0.10% and its earnings retention ratio is 0.6%. If the firm's market capitalization rate (Rs) is 15%, How much is the P/E ratio (P0/E1)?