Allen Lumber Company had earnings after taxes of $600,000 in the year 2021 with 200,000 shares outstanding. On October 1, 2022,the firm issued 40,000 new shares. The company took the proceeds from these new shares as well as other operatingimprovements and earnings after taxes improved by 20% in 2022.Calculate Earnings per share for the year 2022. [Show detailed calculation with the formula to get proper credit]

Earnings per share or EPS is an indicator of a company's profitability. The higher the EPS , the…

Answered: Allen Lumber Company had earnings after…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Hendo Inc. is constructing its pro forma financial statements for this year. At years end, Assets were $650,000 and Accounts Payable (the only liabilities account) was $175,000. Sales for the year were $825,000. Hendo expects to grow by 12% this year. Assets and Accounts Payable are expected to grow proportionally to Sales. Common Stock currently equals $175,000 and Retained Earnings are $127,000. Hendo plans to sell $18,000 of new common stock this year. The firm's profit margin on Sales is 5.5%, and 45% of its earnings will be paid out in dividends. How much NEW long-term debt financing will Hendo need this year to finance its expected growth? Hendo is currently operating at full capapcity.
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HEADLAND Ltd. had earnings per share of $4 as of December 31, 2022, but paid no dividends. Earnings were expected to grow at 16.1 percent per year for the following five years. HEADLAND Ltd. will start paying dividends for the first time on December 31, 2027, distributing 50 percent of its earnings to shareholders. Earnings growth will be 5 percent per year for the next six years (that is, from January 1, 2028, through to December 31, 2033). Starting on December 31, 2033, HEADLAND Ltd. will begin to pay out 80 percent of its earnings in dividends and earnings growth will stabilize at 2 percent per year in perpetuity.The required rate of return on HEADLAND stock is 10 percent. What should be the current share price of HEADLAND? (Round intermediate calculations to 6 decimal places, e.g. 15.612125 and the final answer to 2 decimal places, e.g. 15.61.) Current share price of HEADLAND $
Farnsbeck Inc. is forecasting a 15% increase in sales next year. Assume the company is operating at 100% capacity. The company has 50,000 shares of common stock outstanding. The firm will pay out 60% of its Net Income in dividends and move 40% into retained earnings Based on the Income statement and balance sheet below answer the following questions. ASSETS 2020 2019 ASSETS 2020 2019 CASH AND MARKETABLE SECURITIES ACCOUNTS RECEIVABLE INVENTORIES 29,000 25,000 116,000 100,000 145,000 125,000 290,000 250,000 362,000 350,000 CURRENT ASSETS GROSS PLANT AND EQUIPMENT LESS: ACCUMULATED DEPRECIATION 130,000 100,000 232,000 250,000 NET FIXED ASSETS TOTAL ASSETS 522,000 500,000 LIABILITIES AND EQUITY 90,480 34,800 25,420 CURRENT LAIBILITIES 150,700 142,000 145,000 140,000 TOTAL LIABILITIES 295,700 282,000 150,000 150,000 78,000 ACCOUNTS PAYABLE ACCRURALS NOTES PAYABLE 30,000 34,000 LONG TERM DEBT COMMON STOCK ($1.00 par) RETAINED EARNINGS 76,300 68,000 TOTAL OWNER'S EQUITY 226,300 218,000 TOTAL…
Trina's Trikes, Inc. reported a debt-to-equity ratio of 1.81 times at the end of 2018. If the firm's total debt at year-end was $9.00 million, how much equity does Trina's Trikes have? A. $16.29 million B. $1.81 million C. $9.00 million D. $4.97 million
Trina's Trikes, Inc. reported a debt-to-equity ratio of 1.81 times at the end of 2018. If the firm's total debt at year-end was $9.00 million, how much equity does Trina's Trikes have? A. $16.29 million B. $1.81 million C. $9.00 million D. $4.97 million
CARLA Ltd. had earnings per share of $4 as of December 31, 2022, but paid no dividends. Earnings were expected to grow at 14.3 percent per year for the following five years. CARLA Ltd. will start paying dividends for the first time on December 31, 2027, distributing 50 percent of its earnings to shareholders. Earnings growth will be 5 percent per year for the next six years (that is, from January 1, 2028, through to December 31, 2033). Starting on December 31, 2033, CARLA Ltd. will begin to pay out 80 percent of its earnings in dividends and earnings growth will stabilize at 2 percent per year in perpetuity.The required rate of return on CARLA stock is 10 percent. What should be the current share price of CARLA? (Round intermediate calculations to 6 decimal places, e.g. 15.612125 and the final answer to 2 decimal places, e.g. 15.61.) LA S $ Current share price of CARLA
Keokuk Corp. had the following operating results for 2021 & 2020. Keokuk paid dividends of $100,000 per year for both years and made capital expenditures of $45,000 in both years. The company's stock price in 2021 was $12.00 and $10.00 in 2020. In 2021, the industry average earnings multiple was 10, the free cash flow multiple was 20 and sales multiple was 2.00. Thecompany is publicly owned and has 1,050,000 shares of outstanding stock at the end of 2021. A. Calculate the 2021 market value of the company. B. Compare Keokuk’s Equity Book Value to the Market Value. Discuss conceptually (not differences in the numerical calculations) the difference between these two amounts.
If Blue Spruce Company had net income of $312,000 in 2021 and it experienced a 26.6% increase in net income for 2022, what is its net income for 2022? Net income
Esther’s Egg Farm is constructing its pro forma financial statements for this year. At year end, assets were $400,000 and accounts payable (the only current liabilities account) were $125,000. Last year’s sales were $500,000. Esther’s expects to grow by 15 percent this year. Assets and accounts payable are expected to grow proportionally to sales. Common stock currently equals $140,000, and retained earnings are $98,000. Esther’s plans to sell $15,000 of new common stock this year. The firm’s profit margin on sales is 6 percent, and 40 percent of earnings will be paid out as dividends. How much new long-term debt financing will Esther’s need this year to finance its expected growth? Esther’s is currently operating at full capacity.

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