• XYZ Corp. issues preferred stock that pays a dividend of Rs. 5.50 forever. Investors could invest their money at 7%. For how much value will the preferred stock sell? • Stoney Mason, Inc. has sales of $6 million, a total asset turnover ratio of 6 for the year, and net profits of $120,000. What is the company's return on assets? • The stock of the Health Corporation is currently selling for $20 a share and is expected to pay a $1 dividend at the end of the year. If you bought the stock now and sold it for $23 after receiving the dividend, what rate of return would you earn?

Q: The excel Machinery has the current capital structure of 65% equity and 35% debt. Its net income in…

A: The ex-dividend price is the price of a stock on the ex-dividend date.

Q: a) Newdeal Inc. follows a policy of distributing 45% of its profits and investing the rest in the…

A: Intrinsic Value of stock = [ Expected dividend after 1 year / ( Required rate - Growth rate ) ]…

Q: The Giant Machinery has the current capital structure of 65% equity and 35% debt. Its net income in…

A: Working note for dividend paid: Dividend paid =Net profit - (Investment amount * Equity percentage))…

Q: The current year profits of Levelex Inc. is 1.000.000₺ and expected profits for the next year is…

A: Constant dividend model is the model of share valuation in which the share price is calculated on…

Q: 1. Red Bull F1 has 1 million shares outstanding with a total market value of $20 million. The firm…

A: Here, No. of Outstanding Shares is 1,000,000 Total Market Value is $20,000,000 Price Per Share will…

Q: Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $2.55 next year. The growth…

A: Current Share Price: The current price is sometimes referred to as the market value. When a share of…

Q: Dye Trucking raised $150 million in new debt and used this to buy backstock. After the recap, Dye’s…

A: Shareholder Equity: It can be described as the residual claim of the owners of the company after all…

Q: A company’s common stock is currently selling at $40 per share. Its most recent dividend was $1.60,…

A: Cost of retained earnings is calculated by dividend growth model. Last dividend paid = 1.6 growth…

Q: The Giant Machinery has the current capital structure of 65% equity and 35% debt. Its net income in…

A: a) Computation of dividend payout ratio: Hence, the dividend payout ratio is 54.5%.

Q: The firm of X Ltd. purchased a share of ABC Ltd. common stock exactly one year ago for Ksh. 45.…

A: Purchased Price = 45 Selling Price = 85 Dividend = 2.40 Return = [ Selling Price - purchased Price +…

Q: Sunland Inc.’s common shares currently sell for $35 each. The firm’s management believes that its…

A: The cost of equity is the return an investor requires by investing in the equity shares of a…

Q: Trini Exports has a current market value of equity of $315,000. Currently, the firm has excess cash…

A: Excel Spreadsheet: Excel Workings:

Q: The current year's profits of Ferro Inc. is 1200 and the next year's profits are estimated as 1400…

A: Given, current Profit  = 1200 next year profit = 1400 growth rate = (next year profit / current year…

Q: Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $3.25 next year. The growth…

A: According to the general rule of finance, the value of a financial asset represents a sum of present…

Q: One company has just paid a quarterly dividend of $0.60. İt's stock price is $63.20, and the company…

A: Relevant information: Dividend next quarter (D1)=$0.60+$0.20=$0.80Growth rate (g)=4%Cost of…

Q: A firm earns $3550 million in profits and pays $2480 million in dividends for the year. The firm…

A: The dividend is part of the profits given by the company to its shareholders. Preferred…

Q: The Giant Machinery has the current capital structure of 65% equity and 35% debt. Its net income in…

A: In residual dividend payout policy, income available for share holders is first applied to capital…

Q: Ali Inc. expects to generate free-cash of $330000 per year forever. If the firm's cost of capital is…

A: Disclaimer:  Since you have asked multiple questions, we will solve the first question for you. If…

Q: The Giant Machinery has the current capital structure of 65% equity and 35% debt. Its net income in…

A: Ex- dividend price is the price of the stock that does not include the the value of dividend in its…

Q: Shatin Intl. has 10.3 million​ shares, an equity cost of capital of 12.6% and is expected to pay a…

A: Total Stock Value = (Future value of total dividends + repurchasing of stocks) / equity cost of…

Q: Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $3.25 next year. The growth…

A: Given Information: Dividend = $3.25  Growth rate in dividends = 5% Required return for Red Inc =…

Q: CALCULATE the value of the firms when dividends are not paid

A: Information Provided: Capitalization rate = 10% Outstanding shares = 11,000 shares Selling = $110…

Q: Consolidated Pasta is currently expected to pay annual dividends of $10 a share in perpetuity on the…

A: The question is related Dividend policy. The details are given. The Price of Share is calculated…

Q: Suppose you have $10,000 in cash to invest. You decide to sell short $5000 worth of Earlham stock…

A: Investment amount = $10000 Short sell amount = $5000 Treasury bill interest rate = 5% P0 = $40 P1 =…

Q: a) Newdeal Inc. follows a policy of distributing 45% of its profits and investing the rest in the…

A: Growth rate = Retention ratio * Average Profitability Intrinsic Value = Expected Dividend / (…

Q: The Giant Machinery has the current capital structure of 65% equity and 35% debt. Its net income in…

A: As per Residual Dividend Payout: Capital structure = 65% equity and 35% debt (given) Investment to…

Q: a) Newdeal Inc. follows a policy of distributing 45% of its profits and investing the rest in the…

A: Growth rate is calculated by the product of average profitability and the retention ration. Growth…

Q: Apple has 200 shares outstanding. It earns $2,000 per year and expects to pay all of it as…

A: Per year earning = $2,000 Number of shares = 200 Required rate of return = 0.05

Q: AB Engineering Ltd. belongs to a risk class for which the capitalization rate is 10%. It currently…

A: Capitalization rate (Ke)= 10% Outstanding shares (n)= 11,000 shares @$110 each (P0) Dividend to be…

Q: The Giant Machinery has the current capital structure of 65% equity and 35% debt. Its net income in…

A: a) Calculate the dividend pay out ratio as follows: Dividend Payout ratio = total dividends/ total…

Q: Borg Security Systems is considering the sale of 12,000 shares of stock to finance development of a…

A: Common shares are the equity holders of the entity and these are the owners of the entity.

Q: The Giant Machinery has the current capital structure of 65% equity and 35% debt. Its net income…

A: Given information: Net profit of company is $250,000 Investment required is $175,000 Market value…

Q: BQ, Incorporated, is considering making an offer to purchase iReport Publications. The vice…

A: iReport Information  Price earning ratio = Market Price / Earnings Price earning ratio = 8.80…

Q: The stock of Payout Corp. will go ex-dividend tomorrow. The dividend will be $1 per share, and there…

A: Dividend is the amount of return on the shares of an entity.

Q: Valence Electronics has 213 million shares outstanding. It expects earnings at the end of the year…

A: Companies have different alternatives to invest their money in, but they should always compare the…

Q: This year, Hope Corporation paid a dividend of $0.50 per share.  The company expect dividends to…

A: Value of share price = [D0 x (1 + g)]/(r - g) D0 = Current dividend g = Growth rate r = required…

Q: TJ's has a market value equal to its book value. Currently, the firm has excess cash of $218,500,…

A: Given:

Q: The Giant Machinery has the current capital structure of 65% equity and 35% debt. Its net income in…

A: The Ex-dividend price measures the drop in the price of the shares as the stock goes ex-dividend.…

Q: The Giant Machinery has the current capital structure of 65% equity and 35% debt. Its net income in…

A: For new projects or investment, firms require funds which is arrange by issuing securities. Firm has…

Q: BQ, Incorporated, is considering making an offer to purchase iReport Publications. The vice…

A: Answer -  Part 1 -  Calculation of the value of iReport to BQ now -  The price earning growth ratio…

Q: Company Z has a total value of $ 500,000. On its balance sheet, it has a debt of $ 150,000 paid at…

A: The capital structure is the structure of source of finance of funds of the company.

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.