Equity ratio = 1/2.5 = .40 Debt ratio + equity ratio = 1 1-equity ratio = debt ratio 1-.40 = .60 or 60% 3-3 Winston Washers’s stock price is $75 per share. Winston has $10 billion in total assets. Its balance sheet shows $1 billion in current liabilities, $3 billion in long-term debt, and $6 billion in common equity. It has 800 million shares of common stock outstanding. What is Winston’s market/book ratio?
9. Given: wages, salaries, and fringe benefits = $7.2 trillion; interest = $550 billion; profits = $300 billion; rent = $50 billion; indirect business taxes = $400 billion; and depreciation = $600 billion. Find National Income, NNP, and GDP. 10. Given: Consumption = $5.8 trillion; investment = $1 trillion; government spending = $1.2 trillion; indirect business taxes = $300 billion; imports = $650 billion; and exports = $550 billion.
FI - 515 Managerial Finance Week 1 Assignment PROBLEM 2-6: Statement of Retained Earnings In its most recent financial statements, Newhouse Inc. reported $50 million of net income and $810 million of retained earnings. The previous retained earnings were $780 million. How much in dividends was paid to shareholders during the year? Answer:- Dividends Paid = Previous Balance Retained Earnings + Net Income - Recent Retained Earnings Dividends Paid = ($780,000,000 + $50,000,000) - $810,000,000 = $830,000,000 - $810,000,000 = $20,000,000 = $20 Million PROBLEM 2-7: Corporate Tax Liability The Talley Corporation had a taxable income of $365,000 from operations after all operating costs but before (1) interest charges of $50,000, (2) dividends received of $15,000, (3) dividends paid of $25,000, and (4) income taxes. What are the firm’s income tax liability and its after-tax income?
A company has provided the following data: Sales 3,000 units Sales price $70 per unit Variable cost $50 per unit Fixed cost $25,000 If the sales volume decreases by 25%, the variable cost per unit increases by 15%, and all other factors remain the same, net income will: A) decrease by $31,875. B) decrease by $15,000. C) increase by $20,625. D) decrease by $3,125. Sales (3,000 * 70)…………………….
Nikko Corp's total common equity at the end of last year was $305,000 and its net income after taxes was $60,000. What was its ROE(Return on Equity)? (Points : 6) 16.87% 17.75% 18.69% 19.67% 20.66% Formula used in Return on Equity calculation is: 3. You have a chance to buy an annuity that pays $1,000 at the end of each year for three years. You could earn 5.5% on your money in other investments with equal risk.
depreciation over 3 years Depreciation costs per year: 24/3= 8 mln per year. Q3. Tax rate in 2012 = Income Tax Expense / Income Before Tax = 1127mln/4914 mln = 22,93% Q4. | Year 0 | Year 1 | Year 2 | Year 3 | | | | | | | | R&D expenses | -77 | | | | | | | | | | | Total Revenues | | 110 | 83 | 55 | All in millions | Cost of Goods Sold | | -8 | -8 | -5 | | Gross Profit | | 102 | 75 | 50 | | depreciation | | -8 | -8 | -8 | | Adm/sales/etc | | -3 | -3 | -2 | | EBIT | -77 | 91 | 64 | 40 | | Unl Net income | -59,34 | 70,13 | 49,32 | 30,83 | | Q5.
Net income ÷ Avg. stockholders' equity 32,000 ÷ 280,100 = 11.4% 32,800 ÷ 268,000= 12.2%* p. Net income - Preferred dividend Avg. common shares outstanding 29,200 ÷ 10,000 = $2.92 per Share 30,000 ÷ 10,000 = $3.00 per Share q. Stockholders' equity - Preferred rights Avg. common shares outstanding (292,200 - 80,000) ÷ 10,000 = $21.22 per Share (268,000 - 80,000) ÷ 10,000 = $18.80 per Share r. Market price ÷ EPS 12.50 ÷ 2.92 = 4.28 11.75 ÷ 3.00 = 3.92 s. Dividends per share ÷ Market price 0.50 ÷ 12.50 = 4 % 0.50 ÷11.75 = 4.26% *Averages cannot be computed from the data provided in the
Market value per share: $24 So, total equity: 500 million*$24=$12,000 million (2) Total debt= long term debt=$2500 million (3) Proportion of Equity: E(D+E)=$12,000million($2500million+$12,000million)=0.83 Proportion of Debt: D(D+E)=$2500million($2500million+$12,000million)=0.17 (4) Cost of Equity: CAPM: E(Ri)=Rf+βi*(Rm-Rf)= 4.6%+1.10*6%=4.6%+6.6%=11.2% (5) Rate of bank loan payable: 5.38%+1%=6.38%. Rate of long-term debt: 5.78% (6) Cost of debt: 5.78%*(1-40%)=0.03468 (7) WACC=E(D+E)*(cost of equity)+ D(D+E)*(cost of debt)=0.83*11.2%+0.17*0.03528=9.9%
Delta Airline’s Cost of Capital A Case Study Part I: Compute Cost of Debt/Cost of Equity/ WACC • The beta of the stock is 0.90, based upon a regression of Delta stock returns against the S&P 500 Index. • The share price is $27.70, and there are 850,902,527 shares outstanding. Delta’s market cap is 23.57 billion. • The firm has $11,082 million in long-term debt on its balance sheet. Delta incurs a marginal corporate tax rate of 30%.
In the financial statements, the firm has reported assets of $9 million, liabilities of $5 million, after-tax earnings of $2 million, and 750,000 outstanding shares of common stock. a. Calculate the earnings per share of Bozo Oil’s common stock. b. Assuming that a share of Bozo Oil’s common stock has a market value of $40, what is the firm’s price-earnings ratio?