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The market is expected to rise over the coming year. For a stock with a Beta of -0.8 : the expected value of the stock's rate of return will exceed the market rate of return in the coming year.
At the end of last year, Roberts Inc. reported the following income statement (in millions of dollars). On the basis of this information, what will be the forecast for Robert's year-end net income?
If Homer reports net income of $2,000,000 and it follows a residual dividend payout policy, what will be its divident payout ratio?
Project L costs $52,125, its expected net cash inflows are $12,000 per year for 8 years and its WACC is 12 percent. What is the project's NPV? What is the project's discounted payback?
The Rangoon Timber Company has the following ratios: Sales/Total assets = 2.23; ROA = 9.69%; ROE = 16.4%What are Rangoon's profit margin and debt ratio?
The Pawlonia Tree Company has an ROA of 12 percent, a 7 percent profit margin, and an ROE of 17 percent. What is the company's total asset turnover? What is the equity multiplier?
Smith believes it could issue new bonds at par that would provide a smiliar yield to maturity. If its marginal tax rate is 35 percent, what is Smith's after-tax cost of debt?
The Printing Company stock is selling for $32.60 a share based on a 14 percent rate of return. What is the amount of the next annual dividend if the dividends are increasing by 2.5 percent annually
Sustainable Growth If the Parodies Corp. has a 16 percent ROE and a 20 percent payout ratio, what is its sustainable growth rate?
What are the advantages and disadvantages of net present value, internal rate of return and payback period. Are they any examples of how you may use any of these concepts.
Suppose a company's operating cash flow was negative for several years running. Is this necessarily a good sign or a bad sign?
Steve Madison needs $250,000 in 10 years. How much must he invest at the end of each year, at 11% interest, to meet his needs?
Stone Sour, Inc., has sales of $16,550, costs of $5,930, depreciation expense of $1,940, and interest expense of $1,460. If the tax rate is 35 percent, what is the operating cash flow, or OCF?
Sorenson Inc. has sales of $3,112,489, a gross profit margin of 23.1 percent, and inventory of $833,145. What are the company's inventory turnover ratio and days' sales in inventory?
Sosa could borrow $100,000 from its bank to finance the purchase at an annual rate of 9%. Should Sosa borrow from the bank or use the manufacturer's payment plan to pay for the equipment?
SDI, Inc., has net working capital of $1,350, current liabilities of $4,290, and inventory of $1,820. What is the current ratio? What is the quick ratio?
Schism, Inc., has a total debt ratio of 0.70, total debt of $265,000, and net income of $24,850. What is the company's return on equity?
Roy Gross is considering an investment that pays 7.6 percent. How much will he have to invest today so that the investment will be worth $25,000 in six years?
Sales Forecast Why do you think most long-term financial planning begins with sales forecasts? Put differently, why are future sales, the key input?
Rolston Recording has total assets of $10,500,000 and a total asset turnover of 2.10 times. If the return on assets is 13 percent, what is its profit margin?
Today bonds of similar risk and maturity must pay an annual coupon of 6.25 percent to sell at par value. Assuming semiannual coupon payments, what will be the current market price of the firm's b
Return on Equity Firm A and firm B have debt-total asset ratios of 55% and 45% and returns on total assets of 20% and 28%, respectively. Which firm has a greater return on equity?
Preferred stock valuation: The preferred stock of Axim Corp. is currently selling at $47.13. If the required rate of return is 12.2 percent, what is the dividend paid by this stock?
On January 1, 2008, a company agrees to pay $20,000 in three years. If the annual interest rate is 10%, determine how much cash the company can borrow with this agreement.
Mark Twain's VISA balance is $1,124.40. He may pay it off in 18 equal end-of-month payments of $75 each. What interest rate is Mark paying?