Use the DuPont system and the following data to find return on equity. (Do not roun intermediate calculations. Round your answer to 1 decimal place.) Leverage ratio Total asset turnover Net profit margin Dividend payout ratio Return on equity 2.9 2.7 6.2 % 33.2 % %
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- Some recent financial statements for Smolira Golf, Inc., follow. SMOLIRA GOLF, INC. Balance Sheets as of December 31, 2018 and 2019 2018 2019 2018 2019 Assets Llabiltles and Owners' Equlty Current assets Current liabilities $ 2,198 $ 2,690 $ 2,941 $ 2,857 Accounts payable 4,722 12,658 Cash Notes payable Other Accounts recelvable 5,691 13,692 1,795 2,206 116 Inventory 99 Total $20,321 $22,240 Total $ 4,092 $ 5,012 $ 14,200 $16,960 Long-term debt Owners' equity Common stock 42,500 and paid-in surplus $42,500 $ Accumulated retained 39,769 Flxed assets 15,699 earnings Net plant and 82,269 $56,170 $ 82,001 Total $ 58,199 $ equipment Total liabilitles and owners' 104,241 Total assets $76,491 $104,241 $ 76,491 $ equity SMOLIRA GOLF, INC. 2019 Income Statement Sales $189,170 Cost of goods sold Depreclation 127,103 5,243 $56,824 1,340 EBIT Interest pald Taxable Income $55,484 Тахes 19,419 Net Income $36,065 Dividends $ 11,995 24,070 Retalned earningsyou have been provided with the following data D1=$1.27 PO=60 and G=8 constant. What is the cost of equity from retained earnings based on the DCF approach?Some recent financial statements for Smolira Golf, Incorporated, follow. Assets Current assets Cash Accounts receivable Inventory Total Fixed assets Net plant and equipment Total assets Sales Cost of goods sold Depreciation EBIT Interest paid Taxable income Taxes 2021 SMOLIRA GOLF, INCORPORATED 2022 Income Statement Net income Dividends Retained earnings $ 6,358 9,248 14,580 $ 30,186 $ 90,361 $ 120,547 Balance Sheets as 2022 $ 16,000 26,459 SMOLIRA GOLF, INCORPORATED of December 31, 2021 and 2022 Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Other $ 7,866 11,445 29,641 $ 48,952 $ 107,206 $ 156,158 287,318 220, 396 10,913 $ 56,009 2,264 $ 53,745 11, 286 $ 42,459 Total Long-term debt Owners' equity Common stock and paid-in surplus Accumulated retained earnings Total Total liabilities and owners' equity 2021 $ 4,880 3,959 198 $ 9,037 $ 32,100 $ 40,000 39,410 $ 79,410 $ 120,547 2022 $ 5,381 4,479 429 $ 10,289 $ 40,000 $ 40,000 65,869 $ 105,869 $ 156, 158
- consider the following data RF= 4.15% RPM = 5.35% and B= .85 based on the CAPM approach what is the cost of equity from retained earnings?Using the Du Pont Identity Method, calculate return on equity given the following information. Profit margin 16%; total asset turnover 0.85; equity multiplier 1.5. OA. OB. O C. O D. OE 20.40% 21.40% 22.40% 23.40% 24.40%Required: Compute the following: (For Requirements 1 to 4, enter your percentage answers rounded to 2 decimal places (i.e., 0.1234 should be entered as 12.34).) 1. Gross margin percentage. 2. Net profit margin percentage. 3. Return on total assets. 4. Return on equity. 5. Was financial leverage positive or negative for the year? 1. Gross margin percentage % 2. Net profit margin percentage % 3. Return on total assets % 4. Return on equity % 5. Financial Leverage
- Estimate its cost of common equity, Maxell and Associcates recently hired you. Obtain the following data, D0=$0.90, P0= $27.50, gl=7% constant. Based on the dividend grwoth model, What is the cost of common for reinvested earnings? (10.50%,9.29%,10.08%,9.68%,10.92%)Assume that you are given the following ratios: Asset turn-over: -1.5x Return on Assets: -3% Return on equity: -5% What is the debt ratio?You have access to the following information and want to calculate the debt-to-equity ratio for the firm. Return on Equity: 23.87% Profit Margin: 13.81% Total Asset Turnover: 0.65 Answer as a DECIMAL using two decimal places.
- tol Processing ng Help Save & Exit Submit Saved Practice Problems i Check my work Eaton Electronic Company's treasurer uses both the capital asset pricing model and the dividend valuation model to compute the cost of common equity (also referred to as the required rate of return for common equity). Assume: Rf = 7% Km 10% = 1.6 D1 = $ 0.70 $ 19 8% %3D PO = nt a. Compute Ki (required rate of return on common equity based on the capital asset pricing model). (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) ences Ki b. Compute Ke (required rate of return on common equity based on the dividend valuation model). (Do not round intermediate calculations, Input vour answer as a percent rounded to 2 decimal places.) < Prev 10 of 10 Next Mc Graw Hill 149 MacBook AirReturn on equity (ROE) using the traditional DuPont formula equals to A. (net profit margin) (interest component) (solvency ratio) B. (net profit margin) (interest component) (liquidity ratio) C. (net profit margin) (total asset turnover) (quick ratio) D. (net profit margin) (total asset turnover) (solvency ratio)Calculate the Weighted Average Cost of Capital (WACC) for McCormick and Company using the formula WACC = (WD x RD x (1-T)) + (WS x Rs) Note that -- Rs = the cost of equity Rd = the cost of debt T = the tax rate WD = Value of debt / (Value of debt plus value of equity) WS = Value of equity / (Value of debt plus value of equity) **Note that the weight of debt plus the weight of equity must total to 100%, as there are only two components in the capital structure.** In order to estimate the weights of debt and equity in the total capital structure, the CFO suggests using the book value of debt and the market value of equity. To determine the book value of debt, use data from the year end November 2019 McCormick 10-K. Look on the Balance sheet and add the following -- Short term borrowings, Current portion of long term debt, and Long term debt. To determine the market value of equity, use the following data: On March 17, 2020 the market value of equity (or "Market Cap")…