Nos. 8 tofollowing financial information:Baron Family, Inc. for the last 12 months has theBalance SheetTotal Liabilities - Php 9,000,000.00Income StatementSales - Php 20,000,000.00Gross Profit - Php 5,000,000.00OPEX - Php 2,000,000.00Financial RatiosDebt to Equity Ratio - 3:1Dividend Yield Ratio - 10%Dividend Pay-out Ratio - 0.20:1Baron Family, Inc. is planning to sell 20% of its business and wouldlike to calculate the value of its business using various valuationmethods.8. How much is the value of 20% of the business using Book ValueMethod?a. Php,800,000.00b. Php 9,000,000.00c. Php 600,000.00d. Php 3,000,000.009. How much is the value of 20% of the business using DividendPaying Capacity?a. Php 6,000,000.00b. Php 1,200,000.00c. Php 600,000.00d. Php 900,000.0010. How much is the value of 20% of the business using Multiplesof Eaming Valuation Method assuming appropriate multiplier of1.5?a. Php 4,500,000.00b. Php 1,200,000.00c. Php 600,000.00d. Php 900,000.00

Earnings = Sales - Gross profit - OPEX =2000000-5000000-2000000 =13,000,000

Answered: Total Liabilities - Php 9,000,000.0…

Business

Accounting

Total Liabilities - Php 9,000,000.0 ncome Statement Sales - Php 20,000,000.00

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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Question

Nos. 8 to
following financial information:
Baron Family, Inc. for the last 12 months has the
Balance Sheet
Total Liabilities - Php 9,000,000.00
Income Statement
Sales - Php 20,000,000.00
Gross Profit - Php 5,000,000.00
OPEX - Php 2,000,000.00
Financial Ratios
Debt to Equity Ratio - 3:1
Dividend Yield Ratio - 10%
Dividend Pay-out Ratio - 0.20:1
Baron Family, Inc. is planning to sell 20% of its business and would
like to calculate the value of its business using various valuation
methods.
8. How much is the value of 20% of the business using Book Value
Method?
a. Php,800,000.00
b. Php 9,000,000.00
c. Php 600,000.00
d. Php 3,000,000.00
9. How much is the value of 20% of the business using Dividend
Paying Capacity?
a. Php 6,000,000.00
b. Php 1,200,000.00
c. Php 600,000.00
d. Php 900,000.00
10. How much is the value of 20% of the business using Multiples
of Eaming Valuation Method assuming appropriate multiplier of
1.5?
a. Php 4,500,000.00
b. Php 1,200,000.00
c. Php 600,000.00
d. Php 900,000.00

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