An investor has estimated that next year's sales for Pagoda Hotel will be RM100 million. Pagoda Hotel has 5 million shares outstanding. It generates a net profit margin of about 10%, and has a dividend payout ratio of 50%. Interest expense is RM10 million, taxes RM10 million, depreciation RM15 million, and amortisation about RM5 million. All amounts are expected to remain the same next year. Required: With the above information, calculate the following: (e) The expected price – to – cash – flow ratio for next year.
An investor has estimated that next year's sales for Pagoda Hotel will be RM100 million. Pagoda Hotel has 5 million shares outstanding. It generates a net profit margin of about 10%, and has a dividend payout ratio of 50%. Interest expense is RM10 million, taxes RM10 million, depreciation RM15 million, and amortisation about RM5 million. All amounts are expected to remain the same next year. Required: With the above information, calculate the following: (e) The expected price – to – cash – flow ratio for next year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:An investor has estimated that next year's sales for Pagoda Hotel will be RM100 million. Pagoda
Hotel has 5 million shares outstanding. It generates a net profit margin of about 10%, and has a
dividend payout ratio of 50%. Interest expense is RM10 million, taxes RM10 million, depreciation
RM15 million, and amortisation about RM5 million. All amounts are expected to remain the same
next year.
Required:
With the above information, calculate the following:
(e) The expected price – to – cash – flow ratio for next year.
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