Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
12th Edition
ISBN: 9781259144387
Author: Richard A Brealey, Stewart C Myers, Franklin Allen
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 28, Problem 4PS
Performance measures Look again at Table 28.10. At the end of fiscal 2014, Starbucks had 748 million shares outstanding with a share price of $81.25. The company’s weighted-average cost of capital was about 9%. Calculate:
- a. Market value added.
- b. Market-to-book ratio.
- c. Economic value added.
- d. Return on start-of-the-year capital.
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Students have asked these similar questions
Firm M has a margin of 12%, turnover of 1.5, sales of $870,000, and average stockholders' equity of $360,000.
Calculate Firm M’s average total assets, net income, return on investment (ROI), and return on equity (ROE).
The most recent financial statements for Bello Co. are shown here:
Income Statement
Balance Sheet
Sales
$
18,900
Current assets
$
11,700
Debt
$
15,700
Costs
12,800
Fixed assets
26,500
Equity
22,500
Taxable income
$
6,100
Total
$
38,200
Total
$
38,200
Taxes (21%)
1,281
Net income
$
4,819
Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 30 percent dividend payout ratio.
What is the sustainable growth rate?
Suppose that Psy Ops Industries currently has the balance sheet shown below, and that sales for the year just ended were $4.4 million. The firm also has a profit margin of 20 percent, a retention ratio of 25 percent, and expects sales of $7.4 million next year.
Assets
Liabilities and Equity
Current assets
$ 1,980,000
Current liabilities
$ 1,672,000
Fixed assets
3,700,000
Long-term debt
1,800,000
Equity
2,208,000
Total assets
$ 5,680,000
Total liabilities and equity
$ 5,680,000
If fixed assets have enough capacity to cover the increase in sales and all other assets and current liabilities are expected to increase with sales, what amount of additional funds will Psy Ops need from external sources to fund the expected growth?
Note: Enter your answer in dollars not in millions. Negative amount should be indicated by a minus sign.
Chapter 28 Solutions
Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 28 - Prob. 1PSCh. 28 - Financial ratios Table 28.10 gives abbreviated...Ch. 28 - Performance measures Look again at Table 28.10. At...Ch. 28 - Prob. 5PSCh. 28 - Financial ratios True or false? a. A companys...Ch. 28 - Book rates of return Keller Cosmetics maintains an...Ch. 28 - Prob. 8PSCh. 28 - Prob. 9PSCh. 28 - Prob. 10PSCh. 28 - Prob. 11PS
Ch. 28 - Prob. 12PSCh. 28 - Prob. 13PSCh. 28 - Prob. 14PSCh. 28 - Performance measures Describe some alternative...Ch. 28 - Prob. 16PSCh. 28 - Prob. 17PSCh. 28 - Prob. 18PSCh. 28 - Financial ratios Sara Togas sells all its output...Ch. 28 - Prob. 20PSCh. 28 - Prob. 21PSCh. 28 - Prob. 22PSCh. 28 - Prob. 23PSCh. 28 - Prob. 25PSCh. 28 - Prob. 26PSCh. 28 - Prob. 27PS
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