Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement $42,000 33,000 Sales Costs $ 9,000 1,890 Taxable income Taxes (21%) Net income $ 7,110 $1,500 Dividends Addition to retained 5,610 earnings The projected sales growth rate is 15 percent. Prepare a pro forma income statement assuming costs vary with sales and the dividend payout ratio is constant.

Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement $42,000 33,000 Sales Costs $ 9,000 1,890 Taxable income Taxes (21%) Net income $ 7,110 $1,500 Dividends Addition to retained 5,610 earnings The projected sales growth rate is 15 percent. Prepare a pro forma income statement assuming costs vary with sales and the dividend payout ratio is constant.

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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Assume the following information pertains to Zigler Corporation: Sales $1,000,000 Total Variable Costs (40% of sales) 400,000 Fixed Costs EBIT Interest Expense EBT Taxes (21%) EAT #shares outstanding EPS 300,000 300,000 100,000 200,000 42,000 158,000 100,000 $1.58 Determine EPS if sales increase to $1,200,000. Then determine the DOL, the DFL, and the DCL.
Assume that Clampett, Inc. has $200,000 of sales, $150,000 of cost of goods sold, $60,000 of interest income, and $40,000 of dividends. What is Clampett, Inc.'s excess net passive income? $25,000. $75,000. $100,000. $0. None of the choices are correct.
Nnana Ltd currently retains 60% of its earnings which are R6 a share this year. It earns an ROE of 30%. Assuming a required rate of return of 22%, how much would you pay for Nnana Ltd based on the earning multiplier model? a. b. C. R78.92 R79.88 R82.88 d. R70.80
Consider the following income statement for Larry & Harry drug stores: Revenue - 90mm Variable costs- 48mm Interest on debt- 6mm Depreciation- 0 mm It’s tax rate is 25% and the book value of its equity is 150mm. What is L&H’s coverage ratio? A) 0.18 B) 5.25 C) 6 D) 7 E) 8 F)15
The financial statements of Eagle Sport Supply are shown in the table below. For simplicity, "Costs" include interest. Assume that Eagle's assets are proportional to its sales. Assume a growth rate of 30% in revenue, expenses, and assets in 2023. The tax rate will remain constant. Income Statement Sales Costs $ 4,550 2,050 Pretax income Taxes (at 30.0%) $ 2,500 750 Net income $ 1,750 Balance Sheet, Year-End 2022 Net assets $ 6,600 2021 $ 6,300 Total $ 6,600 $ 6,300 Debt Equity Total 2022 $ 2,800 3,800 2021 $ 2,700 3,600 $ 6,600 $ 6,300 a. Assume that the dividend payout ratio is fixed at 60% and the equity-to-asset ratio is fixed at two-thirds. What is the internal growth rate for 2023? b. What is the sustainable growth rate for 2023? Note: For all requirements, do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. a. Internal growth rate b. Sustainable growth rate % %
Thipaporn Inc. has the following data. If it uses the residual dividend model, how much total dividends, if any, will it pay out? Which answers? $203,063 $225,000 $213,750 $192,909 Capital budget $1,000,000 % Debt 60% Net income (NI) $625,000
A firm with sales of $1,000,000, net profits after taxes of $60,000, total assots of $1,500,000, and totol liabilities of $750,000 has a return on equity ot Select one: O a. 15 percent. b. 20 percent. c. 4 percent. O d. 8 percent. e. None of the above
Assume a corporation has earnings before depreciation and taxes of $100,000, depreciation of $50,000, and that it has a 30 percent tax bracket. Compute its cash flow using the format below. Earnings before depreciation and taxes Depreciation Earnings before taxes Taxes @ 30% Earnings after taxes Depreciation
Firm K has a margin of 9%, turnover of 1.4, and sales of $1,610,000. Required: Calculate Firm K's net Income, average total assets, and return on Investment (ROI). Choose Factors: Choose Numerator: Net Income * Choose Factors: X Average Total Assets /Choose Denominator: = 1 Return on Investment Choose Numerator: /Choose Denominator: 1 1 Net Income Net Income Average Total Assets Average Total Assets 0 Return on Investment Return on Investment 0
Profit margin = 9.1% Capital intensity ratio = .52 Debt-equity ratio = .67 Net income = $102,000 Dividends = $50,500 Based on the above information, calculate the sustainable growth rate for Northern Lights Co. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Loreto Inc. has the following financial ratios: asset turnover = 2.40; net profit margin (i.e., net income/sales) = 5%; payout ratio = 30%; equity/assets = 0.40. a. What is Loreto's sustainable growth rate? b. What is its internal growth rate?
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