Accounting problems Kendrick Manufacturing Corp. (KMC) hastotal assets of $600 million, $80 millionof which are cash. It has total debt of$250 million. If KMC repurchases $30million of its stock, what changes willoccur on its balance sheet? What will itsnew leverage ratio be? GeM Industries' common stock is currentlyselling for $72.15 per share. Last year, thecompany paid dividends of $1.25 per share.The projected growth rate of dividends forthis stock is 4.85%. What rate of return doesan investor expect to receive on this stock if itis purchased today?

Changes to the Balance SheetKMC is repurchasing $30 million of its stock, which means:Cash decreases…

Answered: Kendrick Manufacturing Corp. (KMC) has…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 8P

See similar textbooks

Similar questions

Kendrick Manufacturing Corp. (KMC) has total assets of $600 million, $80 million of which are cash. It has total debt of $250 million. If KMC repurchases $30 million of its stock, what changes will occur on its balance sheet? What will its new leverage ratio be? Help
What will it's new leverage ratio be ?
Kendrick Manufacturing Corp. (KMC) has total assets of $600 million, $80 million of which are cash. It has total debt of $250 million. If KMC repurchases $30 million of its stock, what changes will occur on its balance sheet? What will its new leverage ratio be?
Kms corporation has...accounting question
Accurate Answer
KMS corporation has assets of $650 million, $65 million of which are cash. It has debt of $216.7 million. If KMS repurchases $21.7 million of its stock: a. What changes will occur on its balance sheet? b. What will be its new leverage ratio? a. What changes will occur on its balance sheet? (Select the best choice below.) A. Both the cash balance and shareholder equity will drop by $21.7 million. B. Both the cash balance and shareholder equity will increase by $21.7 million. C. Both accounts receivable and shareholder equity will drop by $21.7 million. D. Debt will increase by $21.7 million and shareholder equity will decrease by $21.7 million. b. What will be its new leverage ratio? The new leverage ratio after the repurchase is %. (Round to one decimal place.)
XYZ Corp. has assets with a market value of $500 million, including $80 million in cash. The company has debt outstanding with a market value of $200 million and 25 million shares outstanding. Assuming perfect capital markets, if the company distributes the $80 million in cash as a dividend, what will its debt-to-equity ratio be after the dividend payment?
Reynolds Construction's current value of operations is $750 million based on the free cash flow valuation model. Its balance sheet shows $50 million of short-term investments that are unrelated to operations, and $300 million of total debt. What is the best estimate for the firm's value of equity, in millions?.
(Capital structure analysis) The liabilities and owners' equity for Campbell Industries is found here: LOADING... . a. What percentage of the firm's assets does the firm finance using debt (liabilities)? b. If Campbell were to purchase a new warehouse for $1.1 million and finance it entirely with long-term debt, what would be the firm's new debt ratio? Accounts payable $519,000 Notes payable $248,000 Current liabilities $767,000 Long-term debt $1,101,000 Common equity $4,647,000 Total liabilities and equity $6,515,000
Calculate the enterprise value of a firm with a market capitalization (market value of equity) of $66 Billion, market value of debt of $22 Billion, and $1 Billion in cash and equivalents. [Note: Enter your answer in Billions; for example, if you calculate the enterprise value to be $100 Billion, then enter just 100 in the answer box.]
KMS corporation has assets of $650 million, $130 million of which are cash. It has debt of $162.5 million. Suppose that KMS decides to initiate a dividend, but it wants the present value of payout to be $65 million. If its cost of equity capital is 10.7%, to what amount per year in perpetuity should it commit (assuming perfect capital market)? KMS should commit to $ million per year. (Round to two decimal places.)
Proust company has fcff of $1.7 billion solve this question?

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

SEE MORE TEXTBOOKS