How does a firm’s capital structure relate to your personal capital structure? In what ways are they similar? Provide examples of how you use debt and equity in your personal financial life that parallels the basic capital structure decisions made by a firm.
Unit 6 Assignment
· Complete Chapter 12 question, 12-1, p. 514
· Complete Chapter 15 problem, 15-3, p. 621
Prepare this Assignment as a Word document. List each question, followed by your
Broussard Skateboard’s sales are expected to increase by 15% from $8 million in 2013 to $9.2 million in 2014. Its assets totaled $5 million at the end of 2013. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2013 current liabilities were $1.4 million, consisting of $450,000 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 40%. Use the AFN equation to forecast Broussard’s additional funds needed for the coming year.
Problem 15-3: Either Enterprises Premium for Financial Risk
Unlevered beta of 1.0
Financed with 50% debt
Levered beta of 1.6
RRF is 5.5%
RRP is 6%
Additional premium required by stockholders for financial risk: solve