Income StatementSalesCGSDeprEBITInterestEBTTaxesNet IncomeDivAdd to REBalance SheetCashARInvenCurrent AssetsNet Fixed AssetsTotal AssetsAPNPAccrued WagesCurrent LiabLTDCommon StockRetained EarningsTotal Common EqT. Liab & EquityYear 0$8,000 1.255,000 1.25600 1.25$2,400200$2,200550 Use 25%$1,650$1,200$ 450AFN$400 1.25600 1.25500 1.25$1,5002.500 1.25$4,000$ 100200100$ 4008001,500 701.300$2,800$4,0001" PassForecast Year10,00020050075062518753,1255,0002002nd PassForecast Year10,00050075062518753,1255,0002001. Calculate the proforma income statement and balance sheet assuming 25% growth (usethe constant growth method and assume the company is at full capacity). Assume additionalfunds needed will come from 60% LTD and 40% from a common stock issue. Interest onthe debt is 9% and the common stock will sell for $30 per share and pay $1.00 per share individends. (Use balance sheet and income statement on page 1)

Income statement:An income statement stands for the statement that shows profits and loss of the…

Answered: 1. Calculate the proforma income…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

The following information is available regarding XYZ Co. sales = $250,000net income = $35,000dividends = $10,000total debt = $100,000total equity = $80,000 What growth rate can be supported without outside financing?
1. Dentaltech Inc. projects the following data for the coming year. If the firm follows the residual dividend model and also maintains its target capital structure, what will its dividend payout ratio be? $2,600,000 Capital budget 10% % Debt $5,500,000 % Equity 5,000,000 Tax rate EBIT $875,000 40% Interest rate Debt outstanding Shares outstanding 60% 40% a. 60.8% b. 57.3% c. 52.2% d. 45.3% e. 71.6%
You have following information about a company: Book value of equity per share = $40 ROE = 20% Required return on equity = 12% Estimated residual income growth rate = 6% Use a single-stage residual income model and calculate the intrinsic value of the company's common stock. a) $40 Ob) $53.33 c) $93.33 d) $120 e) $100
please explain it as well
Che
IBM expects to pay a dividend of $4 next year and expects these dividends to grow at 7% a year. The price of IBM is $90 per share. What is IBM's cost of equity capital? A. 9.65% B. 10.23% C. 12.36% D. 11.44% E. 10.89%
use the following information to develop a spreadsheet model that will calculate the free cash flows and the value of the equity for the company. cost of capital 12% most recent year's sales $1000 nonoperating assets $100 interest-bearing debt $250 operating profit margin 12% working capital/sales 35% fixed assets/sales 20% noninterest-bearing current liabilities/sales 10% rax rate 40% forecasted sales growth years 1-2 12% years 3-5 8% years 6-∞ 4% calculate the value of the firm and the value of the equity in the firm using DCF analysis.
A firm has an equity multiplier of two and total assets of $300. If its return on equity is 10%, what is its net income? O $15.00 O $10.00 O $30.00 O $22.50 O $7.50
Consider a simple firm that has the following market-value balance sheet: Assets Liabilities & Equity Debt Equity $1,030 $410 620 Next year, there are two possible values for its assets, each equally likely: $1,190 and $970. Its debt will be due with 5.1% interest. Because all of the cash flows from the assets must go either to the debt or the equity, if you hold a portfolio invested 40% in the firm's debt and 60% in its portfolio of the debt and equity in the same proportions as the firm's capital structure, your portfolio should earn exactly the expected return on the firm's assets. Show that equity will have the same expected return as the assets of the firm. That is, show that the firm's WACCi the same as the expected return on its assets. If the assets will be worth $1,190 in one year, the expected return on assets will be %. (Round to one decimal place.) If the assets will be worth $970 in one year, the expected return on assets will be %. (Round to one decimal place.) The…
Munich Re Inc. is expected to pay a dividend of $4.82 in one year, which is expected to grow by 4% a year forever. The stock currently sells for $68 a share. The before-tax cost of debt is 9% and the tax rate is 34%. The target capital structure consists of 40% debt and 60% equity. 1. What is the company's weighted average cost of capital?
Growers Inc. has a market capitalization (k) of 14%, and expects earnings next period of $3/share (i.e., in t=1). Growers can earn 15% on new investment (ROE), and plans to plowback 75% of earnings. What is Growers' PVGO? a. $3.94 b. $5.84 c. $10.91
Here is Icknield’s market-value balance sheet (figures in $ millions): Net working capital $550 Debt $800 long term assets $2,150 Equity $1,900 value of firm $2,700 $2,700 The debt is yielding 7%, and the cost of equity is 14%. The tax rate is 21%. Investors expect this level of debt to be permanent. a. What is Icknield’s WACC? b. How would the market-value balance sheet change if Icknield retired all its debt?

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