Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 2, Problem 5P
To determine
The financial ratio for 2018.
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Loreto Incorporated has the following financial ratios: asset turnover = 1.60; net profit margin (i.e., net income/sales) = 6%; payout ratio = 30%; equity/assets = 0.50. What is Loreto's sustainable growth rate? What is its internal growth rate? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
Consider the following information which relates to a given company:
Item
2019 Value
Earnings Per Share
$6.43
Price Per Share (Common Stock)
$39.59
Book Value (Common Stock Equity)
$62.96
million
Total Common Stock Outstanding
2.84
million
Dividend Per Share
$3.52
Analysts expect that the company could maintain a constant annual growth rate in dividends per share of 5.8% in the future, or possibly 7.79% for the next 2 years and 5.29% thereafter. In addition, it is
expected that the risk of the firm, as measured by the risk premium on its stock, to increase immediately from 8.38% to 10.52%. Currently, the risk-free rate is 5.85%.
Required: Determine the new required return for the firm's stock.
% (ROUND YOUR ANSWER TO 2 DECIMAL PLACES. FOR EXAMPLE: 17.23)
Chapter 2 Solutions
Contemporary Engineering Economics (6th Edition)
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