The details regarding three companies are given below: X Ltd r = 12% Ke = 10% E = Rs. 100 Y Ltd r = 8% Ke = 10% E = Rs. 100 Z Ltd. r = 10% Ke = 10% E = Rs. 100 Compute the value of an equity share of each of these companies applying Walter's formula when the dividend pay-out ratio is (a) 0%, (b) 20%, (c) 40%, d) 60%

The details regarding three companies are given below: X Ltd r = 12% Ke = 10% E = Rs. 100 Y Ltd r = 8% Ke = 10% E = Rs. 100 Z Ltd. r = 10% Ke = 10% E = Rs. 100 Compute the value of an equity share of each of these companies applying Walter's formula when the dividend pay-out ratio is (a) 0%, (b) 20%, (c) 40%, d) 60%

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Description: The details regarding three companies are given below:X Ltdr = 12%Ke = 10%E = Rs. 100Y Ltdr = 8%Ke = 10 %E = Rs. 100Z Ltd.r = 10%Ke = 10 %E = Rs. 100Compute the value of an equity share of each of these companies applying Walter's formula when the d

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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Calculate the equity multiplier (total assets / total equity) for the firm below. Make sure you do NOT convert your answer and keep 2 decimals for your final answer.....for examples, if you calculate 6,000/400 = 15, you should enter 15 into BB to be marked correct. Sales $5,000 COGS $1,200 Depreciation $800 Interest $500 Net Income $200 Total Assets 5000 Total Equity 1400
1. You are required to calculate the Weighted Average Cost of Capital (WACC) of Sethoo & Sons Limited from the data below: Black Limited Star Limited Number of Ordinary Shares (GH¢1.00) 2,000,000 1,000,000 Net Income available to Ordinary Shares 600,000 250,000 Gross Dividend 500,000 200,000 Market Price per share 3.00 2.00 Market value of Debts 3,000,000 1,500,000 Annual Growth rate of Dividend 12% 10% Gross Interest yield 10% 11% NOTE: The corporation tax rate is 50%. Debts are currently quoted at GH¢100 per block. 2. Explain why the Market Value Approach of calculating WACC is preferred to the Book Value Approach. 3. What are the uses of Weighted Average Cost of Capital?
Assume Skyler Industries has debt of $4,386,000 with a cost of capital of 7.5% and equity of $5,814,000 with a cost of capital of 10.2%. What is Skyler’s weighted average cost of capital? Round your intermediate calculations and final answer to 3 decimal places. _____%
On the basis of this information, NUBD's weighted-average cost of capital is: (round-off to 2 decimal places)
Assume Skyler Industries has debt of $4,398,941with a cost of capital of 9% and equity of $5,435,265 with a cost of capital of 6.1%. What is Skyler’s weighted average cost of capital for debt? Round to the nearest hundredth, two decimal places and submit the answer in a percentage.
If the earnings per share of the firm is OMR 10 and the market price is OMR 100 and the growth rate is earning of the firm is 5 %. Calculate the cost of equity share capital. a. 12.5% b. 10% c. None of these d. 15%
Q1: Firm A reports a Profit Margin of 5% and a Total Asset Turnover Ratio of 1.5. Their total asset level is $6,000,000. Assume there are 600,000 shares outstanding and the P/E ratio is 13 times. Also, assume the Return on Equity is 14%. Based on this, calculate the price of share/Book value per share ratio, Q2:XLtd., has a current ratlo of 3.5:1 and quick ratio of 2:1. If excess of current assets over quick assets represented by inventories is $ 24000, Calculate current assets and current llablitles.
Based on the following information, what is the firm's weighted average cost of capital of the operating assets, WACCO? Cost of debt, RD: 7% Cost of equity, Rs: 20% Total market value of debt, D: 500 Total market value of equity, S: 1,500 Number of common shares outstanding: 100 Total market value of non-operating assets, N: 200 Cost of non-operating assets, RN: 9% Corporate tax rate, T: 40% O .143009 b. 168751 a. c. .188232 d. .127767
What is the answer ?
Para Inc is trading at a forward (EV/FCFF1) Ratio of 20, a forward (EV/ (EBIT1 (1-Tc)) ratio of 10 and (EV/ Capital) ratio of 2. Based on the information, answe the following A. Para Inc. Return on capital equal to ? B. Para Inc. Growth rate equal to ? C. Weighted average cost of capital equal to?
Assume Skyler Industries has debt of $4,775,777with a cost of capital of 7.8% and equity of $5,798,398 with a cost of capital of 9.6%. What is Skyler’s weighted average cost of capital for equity? Round to the nearest hundredth, two decimal places and submit the answer in a percentage.

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