BARUCH FUND OF CORPORATE FIN. W/CONNECT
10th Edition
ISBN: 9781264531820
Author: BREALEY
Publisher: MCG CUSTOM
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Question
Chapter 11, Problem 1QP
a)
Summary Introduction
To discuss: Theaverage
a)
Expert Solution
Explanation of Solution
The average rate of return for the period 1900-2017 is 11.5%
b)
Summary Introduction
To discuss: The average risk premium for the period 1900-2017.
b)
Expert Solution
Explanation of Solution
The average risk premium for the period 1900-2017 is 7.7%.
c)
Summary Introduction
To discuss: Thestandard deviation of returns for the period of 1900-2017.
c)
Expert Solution
Explanation of Solution
The standard deviation of returns for the period of 1900-2017 is 19.7%
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QUESTION #1:
A) What is the Net Operating Profit After Tax (NOPAT) for 2024?B) What is the Operating Cash Flow for 2024?
C) What is the Free Cash Flow for 2024?
Note: Marketable securities are non-operating current assets, and short-term debt (bank loan) is a non-operating current liability. Both of these items are excluded from the calculation of net operating working capital.
D) If the stock trades for $85 per share at the end of 2024, and there are 315,000 shares outstanding, what is the MVA in 2024?
E) Given that the firm’s WACC is 14%, what is the EVA during 2024?
F) Create common size income statement and balance sheet for 2024, 2023 and 2022.
G) Using 2022 as the base year, create income statement and balance sheet percentage change analysis for 2024 and 2023.
QUESTION #2:
In addition to the AAA Ltd. financial statements in Problem One, you are given more information as follows.
Sales are forecast to increase by 80% in 2025.
Short-term Debt, Long-term Debt, and Common…
Brightwoodę Furniture provides the following financial data for a
given enod:
Sales
Less Variable E
Contribwaon Margin
Less Fixed Expenses
et Income
-
Aount ($) Per Unit ($)
150,000
3
L96,000
13
10
35,000
25,000
a. What is the company's CM ratio?
b. If quarterly sales increase by $5,200 and there is no change in fixed
expenses, by how much would you expect quarterly net operating
income to increase?
Chapter 11 Solutions
BARUCH FUND OF CORPORATE FIN. W/CONNECT
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