Question: Leash N Collar reported a profit margin of 9.9%, total asset turnover ratio of 3.4 times, debt-to-equity ratio of 0.94 times, net income of $590,000, and dividends paid to common stockholders of $390,000. The firm has no preferred stock outstanding. What is Leash N Collar's internal growth rate?
Q: (Measuring growth) Given that a firm's retum on equity is 16 percent and management plans to retain…
A: Growth rate = retention ratio * Return on equity
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A: Weighted Average cost of Capital: It is the cost for the company to raise capital from different…
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A: Retention ratio = 1 - Dividend payout ratio = 1 - 0.35 = 0.65
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Q: need answer
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A: WACC: It is the cost of capital of the firm for raising capital from various sources of finance.…
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Q: Provide Answer of a and b
A:
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A: Raised amount (Book value)$400 millionReturn on equity20%Cost of equity12%Retention ratio50%
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- NoneSuppose Rocky Brands has earnings per share of $2.28 and EBITDA of $30.7 million. The firm also has 5.8 million shares outstanding and debt of $135 million (net of cash). You believe Jared's Outdoor Corporation is comparable to Rocky Brands in terms of its underlying business, but Jared's has no debt. If Jared's has a P/E of 13.6 and an enterprise value to EBITDA multiple of 7.9, estimate the Enterprise Value of Rocky Brands by using both multiples. Which estimate is likely to be more accurate? The Enterprise Value of Rocky Brands by using the P/E ratio is $ 179.8 million. (Round to one decimal place.) The Enterprise Value of Rocky Brands by using the EBITDA ratio is $ million. (Round to one decimal place.) Which estimate is likely to be more accurate? (Select from the drop-down menu.) Hint: The more accurate valuation method would take debt into consideration is the more accurate valuation method.456 Inc has a profit margin of 12%. It has a capital intensity ratio of 0.80 and its debt/equity ratio is 2. The company's net income was $100,000 and company paid a dividend of $70,000. What is the sustainable growth rate? A) 15.61% B) 18.64% C) 12.00% D) 21.95% E) 13.50%
- Wilderness Adventures has earnings per share of $2.45 and dividends per share of $1.05. The total equity of the firm is $850,000. There are 40,000 shares of stock outstanding. The sustainable rate of growth is (Hint: ROE=Net income / Book Value of Equity) %.Suppose Compco Systems pays no dividends but spent $5.16 billion on share repurchases last year. If Compco's equity cost of capital is 12.7%, and if the amount spent on repurchases is expected to grow by 8.2% per year, estimate Compco's market capitalization. If Compco has 5.7 billion shares outstanding, to what stock price does this correspond? Compco's market capitalization will be $ billion. (Round to two decimal places.)The cost of equity using the discounted cash flow (or dividend growth) approach Grant Enterprises's stock is currently selling for $32.45 per share, and the firm expects its per-share dividend to be $1.38 in one year. Analysts project the firm's growth rate to be constant at 7.27%. Estimating the cost of equity using the discounted cash flow (or dividend growth) approach, what is Grant's cost of internal equity? O 15.55% . 11.52% O 12.10% O 10.94% Estimating growth rates It is often difficult to estimate the expected future dividend growth rate for use in estimating the cost of existing equity using the DCF or DG approach. In general, there are three available methods to generate such an estimate: • Carry forward a historical realized growth rate, and apply it to the future. • Locate and apply an expected future growth rate prepared and published by security analysts. • Use the retention growth model. Suppose Grant is currently distributing 50% of its earnings in the form of cash…
- Firm has 120,000 outstanding shares, growth rate of 3.6%, with 648,200 in Free Cash Flow and a reuired rate of return of 12%. What is the value of a share of firm's stock?A firm's current market value of equity is $100 million. It has one million shares outstanding. The firm's equity multiplier is one, and it had sales of $50 million last year. Its profit margin was 5%. What is the firm's implied price-earnings ratio? O 40 O5 O 16 O 20 0 8AAC Inc. earned $3.00 per share. It paid S1.60 in dividends per share. Its return on equity is 126. Find its sustainable growth rate. A. 4.5% B. 5.6% C. 6.3% D. 7.2% E. 8.5%
- Suppose Compco Systems pays no dividends but spent $5.15 billion on share repurchases last year. If Compco's equity cost of capital is 12.3%, and if the amount spent on repurchases is expected to grow by 8.9% per year, estimate Compco's market capitalization. If Compco has 5.9 billion shares outstanding, to what stock price does this correspond?Which would increase a firm's return on equity? A. Issuance of 12% bonds and investing the proceeds to earn more than 12%. B. Increasing the size of cash dividends to shareholders. C. Increase in the firm's price earnings ratio D. Increase in market price of the firm's ordinary share E. none of the aboveBlue Co., a firm that grows at a constant rate of 5%, is trying to estimate its weighted average cost of capital. Blue Co. recently paid a P5 per share dividends to its outstanding ordinary shares. The ordinary share of the firm is currently trading at a price of P52.50. What is the cost of equity of the company that will be used for the purpose of determining the weighted average cost of capital? (In percentage, put percentage sign)