margin.(Analyzing profitability and capital structure) In the year just ended, Callaway Light-4-12E had sales of $5,000,000 and incurred a cost of goods sold of $4,500,000. TheS40 perating expenses were $130,000, and its increase in retained earnings was0,000 for the year. There are currently 100.000 common-stock shares outstanding,and the firm pays a $1.485 dividend per share. The firm has $1,000,000 in interest-bearing debt, on which it pays 8 percent interest.a. Assuming the firm's earnings are taxed at 35 percent, construct the firm's incomestatement.b. Calculate the firm's operating profit margin and net profit margin.C. Compute the times interest earned ratio. What does this ratio tell you about Cal-laway's ability to pay its interest expense?d. What is the firm's return on equity?4-13Male.

Solution : a. Statement showing income of firm Sales $5000000 Cost of goods sold…

Answered: Vzing profitability and capital…

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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1. Flubber Products has current assets of $60,000 and total assets of $340,000. The firm’s sales are $700,000. Flubber’s interest expense is $25,000. All assets are classified as being either current assets or fixed assets. Flubber’s fixed asset turnover is 2. Milton Data Service just paid a dividend of $4.00 per share on its common stock. The dividend is expected to grow at 4% per year forever. Milton has net working capital of $500 million. Currently, the risk-free rate is 5%, the required market return is 10%, and Milton has a beta of 1.4. a. What should be the current market price per share (i.e., the intrinsic value) of Milton stock? b. If the actual market price per share is $56, is Milton undervalued or overvalued? How much is the stock mispriced? 3. I’m Eating Restaurants is expected to pay a dividend of $5.00 per share on its common stock in one year. The dividend is expected to grow at 4% per year forever. Investors require a 12% rate of return on stocks with I’m Eating’s…
Columbus Corp. had $410,000 additions to retained earnings for the year. The firm paid out $190,000 in cash dividends, and it has ending total equity of $6.7 million. The company currently has 210,000 shares of common stock outstanding and the stock currently sells for $75 per share. What is the PE ratio? Round it to two decimal places.
During the past five years, JKL had consistently paid 50% of earnings available to common shareholders as dividends. Next year, projected net income is at P6,000,000. Preferred shareholders receive P1,200,000 in dividends. The company maintains it's capital structure at 25.5% Debt; 15% Preferred stock; 60% common equity. What is the retained earnings break-point next year? A. P5,760,000 B. P4,800,000 C. P4,000,000 D. P6,000,000 E. Answer not given
The Giant Machinery has the current capital structure of 65% equity and 35% debt. Its net income inthe current year is $250,000. The company is planning to launch a project that will require aninvestment of $175,000 next year. Currently, the share of Giant machinery is $25/share.Required:a) How much dividend Giant Machinery can pay its shareholders this year and what is the dividendpayout ratio of the company? Assume the Residual Dividend Payout Policy applies. b) If the company is paying a dividend of $2.50/share and tomorrow the stock will go ex-dividend.Calculate the ex-dividend price tomorrow morning. Assuming the tax on dividend is 15%. c) Little Equipment for Hire is a subsidiary in the Giant Machinery and currently under the liquidationplan due to the severe contraction of operation due to coronavirus. The company plans to paya total dividend of $2.5 million now and $ 7.5 million one year from now as a liquidating dividend.The required rate of return for shareholders is 12%.…
Ferrell Inc. recently reported net income of $8 million. It has 710,000 shares of common stock, which currently trades at $57 a share. Ferrell continues to expand and anticipates that 1 year from now, its net income will be $13.6 million. Over the next year, it also anticipates issuing an additional 248,500 shares of stock so that 1 year from now it will have 958,500 shares of common stock. Assuming Ferrell's price/earnings ratio remains at its current level, what will be its stock price 1 year from now? Do not round intermediate calculations. Round your answer to the nearest cent.
need all answer
Lear & Co has a PE of 17, a forward PE of 14.5, and a price of $67.40 per share. The company has 85.2 million shares outstanding. Net income for next year is projected to be closest to: O A. $396.0 million. O B. $832.7 million. O C. $337.8 million.
A company had total revenues of $59 million, operating margin of 35.1%, and depreciation and amortization expense of $13 million over the trailing twelve months. The company currently has $280 million in total debt and $116 million in cash and cash equivalents. The company's shares are currently trading at $33.2 per share and there are 13 million shares outstanding. What is its EV/EBITDA ratio? Round to one decimal place.
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Net Income for the year is $ 45 Million.Calculate EPS after stock dividend is paid and what impact would the stock dividend have on Gordong manufactures on Balance Sheet.

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