PRIN.OF CORP.FINANCE-CONNECT ACCESS
13th Edition
ISBN: 2810023360757
Author: BREALEY
Publisher: MCG
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Chapter 29, Problem 27PS
- a. What is the internal growth rate of Eagle Sport (see Problem 25) if the dividend payout ratio is fixed at 50% and the equity-to-asset ratio is fixed at two-thirds?
- b. What is the sustainable growth rate?
TABLE 29.17 Financial statements for Eagle Sport Supply, 2019. See Problem 25.
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Using the information in the tables above, please calculate the sustainable growth rate, dividends per share, and intrinsic value per share. Then solve for the present value of growth opportunities.
(Use cells A5 to B8 from the given information to complete this question.)
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Consider the table given below to answer the following question. The long-run growth rate is projected at 7% and discount rate is 10%. Year Asset value Earnings Net investment Free cash flow (FF) Return on equity (ROE) Asset growth rate Earnings growth hate 2 11.00 12.43 14.05 15.87 17.46 19.20 21.13 22.60 1.43 1.43 1.62 1.62 з 1.83 1.83 5 7 8 9 10 24.19 25.88 2.06 2.27 2.40 2.54 2.60 2.18 2.33 1.59 1.75 1.92 1.48 1.58 1.69 1.81 0.48 0.52 0.48 1.06 1.02 0.48 0.52 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.13 0.125 0.12 0.115 0.09 0.09 0.10 0.10 0.13 0.10 0.07 0.07 0.07 0.07 0.10 0.06 0.06 0.03 --0.16 0.07 Assuming that competition drives down profitability (on existing assets as well as new investment) to 12.5% in year 6, 12% in year 7, 11.5% in year 8, and 9% in year 9 and all later years. What is the value of the concatenator business? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Present value million
Chapter 29 Solutions
PRIN.OF CORP.FINANCE-CONNECT ACCESS
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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