You have completed a first pass of a pro-forma balance sheet for Farmer Company. This reveals external financing need of $12 million. The pro-forma income statement shows a Net Income of $100 million and traditionally the firm has paid 40% of its earnings in the form of dividends (which is currently reflected in your pro-forma financials). What payout ratio would eliminate the external financing need of the firm?

Q: a. The​ after-tax cost of debt using the approximation formula is______​%.​(Round to two…

A: Here, To Find: Part A. The​ after-tax cost of debt using the approximation formula =? Part B. WACC…

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 company plans to efficiently maintain the assets in the long run. The average total assets of…

A: Hey, since there are multiple requirements posted, we will answer first three requirements. If you…

Q: Please Show Answers: Plank’s Plants had net income of $10,000 on sales of $100,000 last year. The…

A: The question is based on the concept of Sustainable Growth rate (SGR).SGR is the maximum growth rate…

Q: A Company has adopted a policy whereby it will seek any additional external financing as well as…

A: Growth rate of a firm can be calculated as follows, = Retention Ratio * Internal rate of return

Q: LOFTA Corporation is interested in measuring the cost of each specific type of capital as well as…

A: Hey, since there are multiple subpart questions posted, we will answer the first three questions. If…

Q: LOFTA Corporation is interested in measuring the cost of each specific type of capital as well as…

A: Answer of first 3 parts a. After tax cost of debtKd=I(1-Tax rate)+RV-SVnRV+SV2 where Kd=After tax…

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: Dillon Labs has asked its financial manager to measure the cost of each specific type of capital as…

A: (Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the…

Q: You are working for an imports-exports company. In the current financial year, your company has a…

A: Here, Net Income is $851,000 Cost of New Project is $500,000

Q: Chamin, Inc. has earnings before interest and taxes (EBIT) of $375,000. Chamin has interest expense…

A: The degree of financial leverage shows the effect of fixed financial costs on the earnings of the…

Q: LOFTA Corporation is interested in measuring the cost of each specific type of capital as well as…

A: As per the guidelines, in the case of multi-subparts first three sub-parts can be solved by us. For…

Q: Golden Co., a firm that is not operating at full capacity, balance sheet as of December 31, 2021, is…

A: The question is related external funding needed if there is increase in sales by 20% from the…

Q: Grey Wolf, Inc., has current assets of $2,090, net fixed assets of $9,830, current liabilities of…

A: CURRENT ASSETS = 2090FIXED ASSETS = 9830CURRENT LIABILITY = 1710LONG TERM DEBT = 4520

Q: The company has equity of € 35,000 and interest-bearing debt of € 15,000. The interest premium on…

A: The capital asset pricing model is a model which shows or signifies the relationship between the…

Q: You are analysing NBM firm and obtained the following information: FCFF reported as R198 million,…

A: FCFE is the free cash flow to the equity   The formula for the same:   FCFE = FCFF - Interest (1-tax…

Q: A firm has an net operating profit of P300,000, interest of P35,000, and a tax rate of 25%. The firm…

A: Net operating profit = P300,000 Before tax cost of debt (Kd) = 0.06 Cost of equity (Ke) = 0.15…

Q: TMR Corporation announced that its cash flows from operations is $3,000,000. It also presents that…

A: Free cash flow to equity (FCFE) is a measure of how much cash is available for distribution to…

Q: what is the value of the firm?

A: Free cash flow refers to the cash flow generated by the company in the year from its operations…

Q: A firm generated $697,000 in Sales Revenue, on which it earned Net Income of $139,400. The firm…

A: In sustainable growth rate assumption, the firm will not change its debt equity relationship. We…

Q: A closely- held plastic manufacturing company has been following a dividend policy which can…

A: Walter model has classified three types of firm for optimum dividend payout ratio in order to…

Q: Plank’s Plants had net income of $10,000 on sales of $100,000 last year. The firm paid a dividend of…

A: Given information in question :- Company net income     =$10,000 Company sales…

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: Floral Fantasia has annual sales of $61,888, depreciation of $8,100, interest paid of $970, cost of…

A: Sustainable Growth Rate: The sustainable growth rate (SGR) is the maximum rate of development that a…

Q: Perine, Inc., has balance sheet equity of $5.3 million. At the same time, the income statement shows…

A: Current EPS = net income/ no of outstanding Share Current EPS = 763200/120000 Current EPS =6.36

Q: Medallion Cooling​ Systems, has total assets of $10,900,000​, EBIT of $1,990,000​, and preferred…

A: The earnings per share ratio are used to measure a company's profitability. It shows the amount of…

Q: You have been asked to estimate the value of General Communications, a telecomm firm. General…

A: Computation of operating cash flow:

Q: LOFTA Corporation is interested in measuring the cost of each specific type of capital as well as…

A: WACC is the weighted average cost of capital. It is the discount rate which is used for discounting…

Q: You have been asked by your employers to demonstrate your knowledge in business valuation process,…

A: Here, Dividend Paid is GH¢ 250,000 Return to Equity is `12% Risk premium is 2%

Q: You are given the following information concerning a firm: (please show work) Assets required for…

A: Given:

Q: You have been asked to estimate the value of General Communications, a telecomm firm. General…

A: Calculating operating free cash flow:

Q: Liliac Berhad is a unlevered firm with the cost of equity 20 percent per year. Based on the current…

A: Unleveraged firm means a firm in which there is no debt in the capital structure. In other words it…

Q: A firm has an net operating profit of P300,000, interest of P35,000, and a tax rate of 25%. The firm…

A: WACC = (Ke*Wk) + (Kd*(1-t)*Wd) Where Ke  = Cost of equity Kd  = Cost of debt  Wk = weight of equity…

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: Tomey Supply Company’s financial statements for the most recent fiscal year are shown below. The…

A:

Q: Wazir Ali Corporation expects next year’s net income to be $15 million. The firm’s debt ratio is…

A: Ratio analysis is a tool used by the financial analyst to measure the financial performance of the…

Q: Cheryl Colby, CFO of Charming Florist Ltd., has created the firm’s pro forma balance sheet for the…

A: Balance sheet indicates the financial position of the business entity in the market related to a…

Q: Bulldogs Inc. has forecasted that its net income will be P400,000. The company has debt ratio of…

A: Answer) Under residual model, dividend is paid to common stockholders after deduction of amount to…

Q: The cost of retained earnings is ____​(Round to two decimal​ places.) The cost of new common stock…

A: Cost of retained earnings = D1/P0 + g Cost of new common stock = D1/(P0-F) + g WACC using common…

Q: constant 35 percent dividend payout ratio and has no plans to issue new equity. Any financing needed…

A:

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.

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.