Principles of Corporate Finance
13th Edition
ISBN: 9781260465099
Author: BREALEY, Richard
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter 29, Problem 23PS
Long-term financial plans* Table 29.15 summarizes the 2019 income statement and end-year balance sheet of Drake’s Bowling Alleys. Drake’s
- a. What is the implied level of assets at the end of 2020?
- b. If the company pays out 50% of net income as dividends, how much cash will Drake need to raise in the capital markets in 2020?
- c. If Drake is unwilling to make an equity issue, what will be the debt ratio at the end of 2020?
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3. After studying the Financial Forecast and planning, go through the assumption date given
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Assume today is 15 Jan 2020. You t e the following information regarding Salalah Ceramics
31 Dec 2019
31 Dec 2020
31 Dec 2021
31 Dec 2022
Cash Flow from 12000
Operations
Cash Investment 7600
Cash flow from operations will grow by 10% every year up to 2022 and cash investment will
grow by 20% every year up to 2022.
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1. What is the firm's enterprise value
2. What is the firm's value of equity
AFN equation
Broussard Skateboard's sales are expected to increase by 25% from $7.4 million in 2019 to $9.25 million in 2020. Its assets totaled $2 million at the end of 2019.
Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2019, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 60%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as $1,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar.
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Chapter 29 Solutions
Principles of Corporate Finance
Ch. 29 - Sources and uses of cash State whether each of the...Ch. 29 - Sources and uses of cash Table 29. 11 shows...Ch. 29 - Prob. 3PSCh. 29 - Sources and uses of cash and working capital...Ch. 29 - Prob. 5PSCh. 29 - Prob. 6PSCh. 29 - Cash cycle A firm is considering several policy...Ch. 29 - Collections on receivables Here is a forecast of...Ch. 29 - Collections on receivables If a firm pays its...Ch. 29 - Forecasts of payables Dynamic Futon forecasts the...
Ch. 29 - Cash budget Table 29.13 lists data from the budget...Ch. 29 - Short-term financial plans a. Paymore places...Ch. 29 - Short-term financial plans Which items in Table...Ch. 29 - Short-term financial plans Work out a short-term...Ch. 29 - Prob. 16PSCh. 29 - Prob. 17PSCh. 29 - Long-term financial plans Corporate financial...Ch. 29 - Prob. 19PSCh. 29 - Prob. 20PSCh. 29 - Long-term financial plans Construct a new model...Ch. 29 - Long-term financial plans a. Use the Dynamic...Ch. 29 - Long-term financial plans Table 29.15 summarizes...Ch. 29 - Long-term financial plans Abbreviated financial...Ch. 29 - Prob. 25PSCh. 29 - Forecast growth rate What is the maximum possible...Ch. 29 - Forecast growth rate a. What is the internal...Ch. 29 - Forecast growth rate Bio-Plasma Corp. is growing...Ch. 29 - Long-term plans Table 29.18 shows the 2019...
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