None A company carries an averageannual inventory of $3 million if itestimates the cost of capital is 10%so much costs are 7% and risk callsare 6%. What does it cost per yearto carry this inventory?

Step 1: Introduction to the Annual Inventory"Annual inventory" is a term related to business…

Answered: A company carries an average annual…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...

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What does it cost per year to carry this inventory?
A company carries an average annual inventory of $4.3 million if it estimates the cost of capital is 13% so much costs are 9% and risk calls are 8%. What does it cost per year to carry this inventory?
A company carries an average annual inventory of $4.3 million if it estimates the cost of capital is 13% so much costs are 9% and risk calls are 8%. What does it cost per year to carry this inventory? Please answer this financial accounting question
Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%?a. What are the projected sales in Years 1 and 2?b. What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? c. What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2?d. What is the projected FCF for Year 2?
Your company is evaluating a new factory that will cost $14 million to build. Your target debt-equity ratio is 1. The flotation cost for new equity is 7% and the flotation cost for new debt is 4%. The company is planning to use retained earnings for 50% of the equity financing. What are the weighted average flotation costs as a fraction of the amount invested? What are the flotation costs (in $ million )?
Suppose a company’s most recent free cash flow (i.e., FCF0)was $100 million and is expected to grow at a constant rate of 5percent. If the company’s weighted average cost of capital is 15percent, what is the current value from operations?
Unit sales are expected to reach 30,000 per year, the price per unit is expected to be $90, variable costs are $40 per unit and fixed costs are $80,000 per year. The company pays $250,000 in interest per year. What is the degree of financial leverage at the expected levels? Using the degree of financial leverage, what is the expected percentage change in earnings per share (EPS) if EBIT turns out to be 12% lower than expected?
ROI?
A company has a required return of 12%, a profit margin of 4%, a D/E ratio of 0.5 and total asset turnover of 2. Annual dividends last year were $2.00. A) The company has a dividend payout ratio of 20%; calculate the price and forward P/E ratio. B) If the company would have changed its dividend payout ratio to 60%, what would happen to the price and forward P/E ratio? C) What variables are critical to determine if they should increase or decrease their dividend payout ratio? (Hint be specific what variables do you need to know.)
An analyst is trying to estimate the intrinsic value of VN Co. that has a weighted average cost of capital at 10%. The estimated free cash flows for the company for the following years are: · Year 1 P3,000 · Year 2 P4,000 · Year 3 P5,000 The analyst estimates that after three years, free cash flow will grow at a constant annual percentage of 6%. What is the total intrinsic value of the company’s common stock if combined debt and preferred stock has a P25,000 market value? A. 98,556 B. 109,339 C. 78,310 D. 84,339
Suppose the Widget Company has a capital structure composed of the following, in billions: Debt = Taka 30 million, Common equity = Taka 30 million. If the before-tax cost of debt is 9%, and the tax rate is 30%. The stock price of common share is Taka 30 in the last year the company paid a dividend of Taka 5 and it will grow at the rate of 5% for ever. What is Widget’s weighted average cost of capital? Now assume that company has a project that needs Taka 130 million and the company plans to maintain its present capital structure and needs to issue new common stocks and the flotation cost would be 15%. Using the concept of breakpoint estimate the new WACC for the company.
A company expects sales of $420 million next year assuming a 20% increase from the previous year. The firm anticipates $29.17 million in retained earnings after taxes and dividends have been paid, assuming that $1 million in depreciation expense have been deducted. Working capital is expected to represent 40% of change in sales. Required: Determine the amount of surplus (or deficit) in funds. k (INPUT YOUR ANSWER IN K, ROUNDED TO 2 DECIMAL PLACES. FOR EXAMPLE: 1.23. USE THE MINUS SIGN TO INDICATE A NEGATIVE ANSWER. FOR EXAMPLE: -1.23)

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A company carries an average annual inventory of $3 million if it estimates the cost of capital is 10% so much costs are 7% and risk calls are 6%. What does it cost per year to carry this inventory?