Cost Account Microsoft Corp. will pay a dividend of $2.04 per share next year.Investors anticipate that the annual dividends will grow by 2% per yearforever, and they require a 12% discount rate. Calculate the value of thestock. 2. The ABC Co. uses the gross profit method to estimateinventory and cost of goods sold for interim reporting purposes.Management estimates that the average gross profit rate is 25 percentof sales. The following data relate to the month of May:Inventory cost, July 1 $30,000Purchases during the month at cost 80,400Sales 100,800Sales returns 3,600Using the data above, what is the estimated ending inventory at July31?A. $24,300B. $25,200C. $34,800D. $37,500

1. Value of Microsoft Stock using Dividend Discount Model (DDM): The formula to calculate the stock…

Answered: Microsoft Corp. will pay a dividend of…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter16: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 11P

See similar textbooks

Similar questions

Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35 days, and a payables deferral period of 25 days. Assume that cost of goods sold is 80% of sales. What is the length of the firm’s cash conversion cycle? If annual sales are $4,380,000 and all sales are on credit, what is the firm’s investment in accounts receivable? How many times per year does Negus Enterprises turn over its inventory?
Juroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Required: 1. Calculate the return on sales. (Note: Round the percent to two decimal places.) 2. CONCEPTUAL CONNECTION Briefly explain the meaning of the return on sales ratio, and comment on whether Juroes return on sales ratio appears appropriate.
Keller Cosmetics maintains an operating profit margin of 8.15% and a sales-to-assets ratio of 3.20. It has assets of $530,000 and equity of $330,000. Assume that interest payments are $33,000 and the tax rate is 30%. a. What is the return on assets? b. What is the return on equity? Note: For all requirement, enter your answers as a percent rounded to 2 decimal places. a. Return on assets b. Return on equity % %
The Optical Scam Company has forecast a sales growth rate of 20 percent for next year. Current assets, fixed assets, and short-term debt are proportional to sales. The current financial statements are shown here: Sales Costs Taxable income Taxes Net income Dividends Addition to retained earnings Current assets Fixed assets Total assets Assets Current assets Fixed assets INCOME STATEMENT Total assets $ 7,230,000 18,390,000 $ 1,149,982 1,724,853 Assets b-2. External financing needed c. Sustainable growth rate $ 25,620,000 a. Calculate the external funds needed for next year using the equation from the chapter. Note: Do not round intermediate calculations. External financing needed b-1. Prepare the firm's pro forma balance sheet for next year. Note: Do not round intermediate calculations. BALANCE SHEET Short-term debt Long-tern debt Common stock Accumulated retained earnings $ 30,500,000 26,077,300 $ 4,422,700 1,547,945 $ 2,874,755 Liabilities and Equity Total equity Total liabilities and…
Can you please answer this financial accounting question?
The Optical scam company has forecast a sales growth of 20 percent for next year. The current financial statements are shown below: What is pro forma balance sheet for next year? Sales $ 31,600,000 Costs 26,675,500 Taxable income $ 4,924,500 Taxes 1,723,575 Net income $ 3,200,925 Dividends $ 1,280,370 Addition to retained earnings 1,920,555 Balance Sheet Assets Liabilities and Owners' Equity Current assets $ 7,320,000 Accounts payable $ 5,688,000 Long-term debt 6,636,000 Fixed assets 20,172,000 Common stock $ 1,594,000 Accumulated retained earnings 13,574,000 Total equity $ 15,168,000 Total assets $ 27,492,000 Total liabilities and equity
Charlie’s Cycles Inc. has $110 million in sales. The companyexpects that its sales will increase 5% this year. Charlie’s CFO uses a simple linearregression to forecast the company’s inventory level for a given level of projected sales. On the basis of recent history, the estimated relationship between inventories and sales (inmillions of dollars) is as follows:Inventories = $9 + 0.0875(Sales)Given the estimated sales forecast and the estimated relationship between inventories andsales, what are your forecasts of the company’s year-end inventory level and its inventoryturnover ratio?
Payton Inc. reports in its Year 7 annual report, sales of $7,362 million and cost of goods sold of $2,945 million. For next year, you project that sales will grow by 3% and that cost of goods sold percentage will be 1 percentage point higher. Projected cost of goods sold for Year 8 will be: Select one: a. $3,033 million b. $3,019 million c. There is not enough information to determine the amount. d. $3,109 million e. $2,945 million
The current year financial statements of Your Health Corporation reported sales of $142,021 million and accounts receivable of $9,731 million. If sales are projected to increase 4% next year, what is the projected accounts receivable balance for the following year? Note: Use a rounded forecasting factor in your computations (for example, 0.044555 = 4.5%). Select one: O a. $8,659 million O O O O b. $9,920 million c. $8,330 million d. $10,191 million e. $9,731 million
Your company has sales of $97,200 this year and cost of goods sold of $71,200. You forecast sales to increase to $113,100 next year. Using the percent of sales method, forecast next year's cost of goods sold.
MBI Incorporated had sales of $35 million for fiscal 2022. The company's gross profit ratio for that year was 26%. Required: a. Calculate the gross profit and cost of goods sold for MBI for fiscal 2022. b. Assume that a new product is developed and that it will cost $469 to manufacture. Calculate the selling price that must be set for this new product if its gross profit ratio is to be the same as the average achieved for all products for fiscal 2022. c. From a management viewpoint, it could use the estimated selling price as a "target" in conducting marketing research studies to assess its ultimate prospects for success at this price. Complete this question by entering your answers in the tabs below. Required A Required B Required C From a management viewpoint, it could use the estimated selling price as a "target" in conducting marketing research studies to assess its ultimate prospects for success at this price.
(Using common-size financial statements) The S&H Construction Company expects to have total sales next year totaling $15,400,000. In addition, the firm pays taxes at 35 percent and will owe $307,000 in interest expense. Based on last year's operations the firm's management predicts that its cost of goods sold will be 62 percent of sales and operating expenses will total 28 percent. What is your estimate of the firm's net income (after taxes) for the coming year? Complete the pro-forma income statement below: (Round to the nearest dollar.) Pro-Forma Income Statement Sales Cost of goods sold Gross profit Operating expenses Net operating income Interest expense Earnings before taxes Таxes Net income %24 %24

SEE MORE QUESTIONS

Recommended textbooks for you

Corporate Fin Focused Approach

Finance

ISBN:

9781285660516

Author:

EHRHARDT

Publisher:

Cengage

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:

Cengage Learning

Corporate Fin Focused Approach

Finance

ISBN:

9781285660516

Author:

EHRHARDT

Publisher:

Cengage

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS