Problem 29-28 Forecast growth rateBio-Plasma Corp. is growing at 31% per year. It is all-equity-financed and has total assets of $1.1 million. Its return on equity is 21%.Its plowback ratio is 41%.a. What is the internal growth rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1decimal place.)b. What is the firm's need for external financing this year? (Enter your answer in dollars not in millions.)c. By how much would the firm increase its internal growth rate if it reduced its payout rate to zero? (Do not round intermediatecalculations. Enter your answer as a percent rounded to the nearest whole number.)d. What is the firm's revised need for external financing this year? (Enter your answer in dollars not in millions.)a. Internal growth rateb. External financing needc. Internal growth rated. External financing need

The question is based on the concept of plowback ratio, internal rate of return, actual rate and…

Answered: Problem 29-28 Forecast growth rate…

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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25 - For 2023, Volant Inc. is forecast to have Free Cash Flow to the Firm of $1.7 million and Free Cash Flow to Common Equity of $1.3 million. You forecast Free Cash Flow to the Firm to grow at a constant rate of 3.50% while Free Cash Flow to Common Equity grows at 4.00%. Volant’s tax rate is forecast to be 25%. You also collect the data shown below. Book Value Market Value Debt $14.5 million $15.0 million YTM: 4.24% Common Equity $21.0 million $45.0 million Rate of Return: 7.00% Calculate Volant’s Weighted Average Cost of Capital and round to 1 basis point. WACC:
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Problem 8-08 A company had $16 of sales per share for the year that just ended. You expect the company to grow their sales at 7 percent for the next five years. After that, you expect the company to grow 4.25 percent in perpetuity. The company has a 15 percent ROE and you expect that to continue forever. The company's net margins are 5 percent and the cost of equity is 8 percent. Use the free cash flow to equity model to value this stock. Do not round intermediate calculations. Round your answer to the nearest cent. $
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Question 11 ABC company is growing at a constant rate of 8% every year. Last week the company paid a dividend of $2.8. If dividends are expected to grow at the same rate as the fi rm and the required rate of return is 12 percent, what should be the stock’s price four years from now? Show your calculation. Only typing answer Please explain step by step without table and graph thankyou

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