Question:Growth and Profit Margin - Dante Co. wishes to maintain a growth rateof 12 percent per year, a debt-equity ratio of .85, and a dividendpayout ratio of 30 percent. The ratio of total assets to sales isconstant at .95. What profit margin must the firm achieve?Question:Sustainable Growth Rate - You have located the following informationon Rock Company: debt ratio = 45%, capital intensity ratio = 2.45times, profit margin = 18%, and dividend payout ratio = 35%. What isthe sustainable growth rate for Rock?

Growth and Profit Margin for Dante Co. To find the required profit margin for Dante Co., we need to…

Answered: Question: Growth and Profit Margin -…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Price earning ratio question. Can this be solved using excel? Can you assist with answering this question
Given that the NPV per share of the reinvestment of the retained earnings next year for a firm is $2.50. Assuming the growth of the NPV is constant at 5% each year, with the required return rate of 12%, what is the estimated Present Value of Growth Opportunity (PVGO)? a. $35.71 b. $59.23 c. $46.75 d. $24.56
3. The average net profits expected in future by Khalifa and Co. are RO. 30,000 per year. The average capital employed in the business by firm is RO. 200,000. The normal rate of return on the capital employed in similar business is 10%. Calculate good will of the firm by: 1. Super Profit Method on the basis of two-year purchase 2. Capitalization Method
A firm has a profit margin of 15 percent on sales of $20,000,000. If the firm has debt of $7,500,000, total assets of $22,500,000, and an after-tax interest cost on total debt of 5 percent, what is the firm's ROA? Group of answer choices 8.4% 10.9% 12.0% 13.3% 15.1%
Firm-specific requirements 3. List the last eleven-year net incomes of your company and the competitor. Calculate their means, annual growth rate, mean annual growth rates, and standard deviations (STD) in Excel. Copy the results below: Your firm's Net Income (NI) ($millions) Competitor's Net Income Fiscal Your firm's NI Competitor's NI Annual Growth rate year ($millions) Annual Growth rate (%) (%) NA $ 5,007 $ 4,002 $ 3,659 $ 3,134 $ 2,679 $ 2,350 $ 2,377 $ 2,058 $ 2,039 $ 1,709 $ 1,462 $ 2,770 $ 94,680 $ 57,411 $ 55,256 $ 59,531 $ 48,351 $ 45,687 $ 53,394 $ 39,037 $ 37,037 $ 41,733 $ 25,922 $ 55,803 1 2021 NA 2 2020 2019 4 2018 5 2017 2016 7 2015 8 2014 9. 2013 10 2012 11 2011 Мean STD
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.
Frasier Cabinets wants to maintain a growth rate of 5 percent without incurring any additional equity financing. The firm maintains a constant debt-equity ratio of 0.55, a total asset turnover ratio of 1.30, and a profit margin of 9.0 percent. What must the dividend payout ratio be? HINT: Determine if the target growth rate is IGR/SGR. Next, use the formula to determine how much money (%) the firm can afford to payout to stockholders. You will also want to review the DuPont identity. Multiple Choice 26.26 percent 38.87 percent 49.29 percent 6113 percent 73,74 percent
The ROA of your firm is 5%. The firm also has a debt-asset ratio of 70%. If your firm reinvests 100% of its earnings, at what rate can your assets grow without having to change your capital structure? Further, at what rate can your assets grow without having to raise capital externally? I know the formula for sustainable growth is ROE x b / 1 - ROE x b Internal growth ROA x 1 - b / 1 - (ROA x 1- b) But I do not know how to get the information with what is provided. I think I'm missing a formula to go from ROA (which is the 5% provided) to ROE. Can you show me how to solve this problem? Thank you in advance for your help.
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Stevenson's Bakery is an all-equity firm that has projected perpetual EBIT of $183,000 per year. The cost of equity is 13.1 percent and the tax rate is 21 percent. The firm can borrow perpetual debt at 6.3 percent. Currently, the firm is considering converting to a debt–equity ratio of .93. What is the firm's levered value? MM assumptions hold. A. $829,786 B. $1,215,262 C. $1,155,579 D. $997,511 E. $921,985
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A firm wants a sustainable growth rate of 2.73 percent while maintaining a dividend payout ratio of 39 percent and a profit margin of 6 percent. The firm has a capital intensity ratio of 2. What is the debt-equity ratio that is required to achieve the firm's desired rate of growth?

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