Assume the firm has a constant dividend payout ratio and a projected sales increase of 10 percent. All costs, assets, and current liabilities vary directly with sales. The firm is currently at full production. What is the external financing need? Currently, the firm's sales =$4,700, net income is $420, total assets-7890, dividends-125, A/P =790, LTD=3130, and common stock-2780, and the Balance-sheet retained=1190. $462.00 O $385.50 O $324.50 O $137.50

Assume the firm has a constant dividend payout ratio and a projected sales increase of 10 percent. All costs, assets, and current liabilities vary directly with sales. The firm is currently at full production. What is the external financing need? Currently, the firm's sales =$4,700, net income is $420, total assets-7890, dividends-125, A/P =790, LTD=3130, and common stock-2780, and the Balance-sheet retained=1190. $462.00 O $385.50 O $324.50 O $137.50

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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Suppose the growth rate of a firm's profits is 5%, the interest rate is 6%, and the current profits of the firm are $100 million dollars. What is the value of the firm?
The profit margin is 15% and the dividend payout is 70%. Last year sales were RO 100 million and total assets were RO 80 Million. the accounts payable represent 30% of total assets. The operating accurals are RO 2 million. The assets and costs vary directly with sales. The firm operates at full capacity. if the sales growth rate is 10% how much external financing is needed? please show all work and interpretation
A firm has Sales of $25,000,000, total assets of $22,000,000, current assets of $8,000,000, spontaneous liabilities of $5,000,000, a profit margin of 5 percent, a tax rate of 40%, and a dividend payout rate of 20 percent. Sales are expected to increase to $28,000,000 for the coming year, and the firm will need to increase its fixed assets at this level of sales (that is, fixed assets will increase proportionately with sales). Given this information, and using the equation approach, determine the additional funds needed for the coming year. O $950,000 O $1.010,000 Ⓒ$920.000 $980,000 O $1,040,000
I need the answer as soon as possible
Enrich, Inc., has expected earnings of $4 per share for next year. The firm's ROE is 16%, and its earnings retention ratio is 60%. If the firm's market capitalization rate is 12%, what is the present value of its growth opportunities (PVGO)? $28.88 $38.25 O $33.34 $66.67
YiYu Manufacturer wishes to maintain a growth rate of 6 percent a year, a debt-equity ratio of 0.45, and a dividend payout ratio of 30 percent. The ratio of total assets to sales is constant at 1.25. Calculate the profit margin the firm must achieve.
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A firm in the IT sector is considering how to set its dividend policy. It has a capital budget of €3,000. The company wants to maintain a target capital structure that is 15% debt and 85% equity. The company forecasts that its net income this year will be €3,500. If the company follows a residual dividend policy, what will be its total dividend payment and its payout ratio? Dividends = Net income – [(target equity ratio) *(total capital budget)].
Copmany A. has $2,491,100 in current assets and $859,000 in current liabilities. The company's managers want to increase the firm's inventory, which will be financed using short-term debt. How much can the firm increase its inventory without its current ratio falling below 2.2 (assuming all other current assets and current liabilities remain constant)?
Suppose Alcatel-Lucent has an equity cost of capital of 9.1%, market capitalization of $10.36 billion, and an enterprise value of $14 billion. Assume Alcatel-Lucent's debt cost of capital is 5.5%, its marginal tax rate is 34%, the WACC is 7.68%, and it maintains a constant debt-equity ratio. The firm has a project with average risk. Expected free cash flow, debt capacity, and interest payments are shown in the table: a. What is the free cash flow to equity for this project? b. What is its NPV computed using the FTE method? How does it compare with the NPV based on the WACC method? a. What is the free cash flow to equity for this project? The free cash flow to equity for this project is: (Round all answers to two decimal places. Use a minus sign to indicate a negative number.) Year 1 2 FCFE ($ million) 0 3 Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 1 FCF ($ million) D=dxV² 45 39.60 Interest 2.62 0 - 100 47.64 0.00 Print Done 2 99…

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