15.Firm UUU earns $0.1 in profit on every $1 of sales, has $1.2 in assets for every $1 of sales and for has for $1 debt, issue $1.5 equity. The firm pays out 30 percent of its profits to its shareholders (answers format: keep 4 digits after the decimal point. For example: 0.1234) What are the values for ROE What is the value of b, i.e., retention ratio? 7 and ROA ?

15.Firm UUU earns $0.1 in profit on every $1 of sales, has $1.2 in assets for every $1 of sales and for has for $1 debt, issue $1.5 equity. The firm pays out 30 percent of its profits to its shareholders (answers format: keep 4 digits after the decimal point. For example: 0.1234) What are the values for ROE What is the value of b, i.e., retention ratio? 7 and ROA ?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

Here are data on two firms: Equity ($ million) ROC (%) Cost of Capital (%) Debt ($ million) Аспе 140 60 16 10 Арех 440 160 14 11 a-1. Calculate the economic value added? (Do not round intermediate calculations. Enter your answers in millions) Acme Aрех Economic value added milion milion
Calculate the equity multiplier (total assets / total equity) for the firm below. Keep to 2 decimal places and do not convert it. ....for examples, if you calculate 6,000/400 = 15, you should enter 15 into BB to be marked correct. Sales $5,000 COGS $1,200 Depreciation $800 Interest $500 Net Income $200 Total Assets 6000 Total Equity 1300
Q2: For example, a firm's financial data shows the following: Equity = $8,000 Debt = $2,000 Re = 12.5% Rd = 6% Tax rate = 30% Calculate the WACC, enter the values into the equation and solve:
Bank ABC has a Return on Equity (ROE) equal to 22%, a total debt ratio (debt/total assets) equal to 0.9 and an asset utilisation ratio equal to 0.05. From this we know that the profit margin of bank ABC is: (NOTE: By default, the unit of the answer is %. The answer must be input with two 2 decimal places, i.e. if the answer is 12%, please input 12.00) Answer:
Q. 1 Y3K, Inc. has sales of $7425, total assets of $3,500, and a debt-equity ratio of 0.29. Assume the return on equity is 20% What is the net income? (DO NOT round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16) Step 1 Given information, Sales =$6,209 Total assets=$2,825 Debt-equity ratio(D/E)=1.10 Return on equity =11% arrow_forward Step 2 Return on equity(ROE) = (Profit margin)(Total asset turnover)(Equity multiplier) = (Profit margin)(Sales / Total assets)(1 + D/E) Therefore, Profit margin = [(Return on equity)(Total assets)] / [(1 + D/E)(Sales)] =[0.11*2,825]/[( 1 + 1.1)*6,209] =310.75/13,038.9 =0.0238325 Hence, Net income = Sales *profit margin =$6,209* 0.0238 =$147.98 But I am getting an error saying this answer is complete but not entirely correct?
Fill in the table using the following information.Assets required for operation: $4,000Case A—firm uses only equity financingCase B—firm uses 30% debt with an 8% interest rate and 70% equityCase C—firm uses 50% debt with a 12% interest rate and 50% equityIf the answer is zero, enter "0". Round your answers for monetary values to the nearest cent. Round your answers for percentage values to one decimal place. A B C Debt outstanding $ $ $ Stockholders' equity $ $ $ Earnings before interest and taxes $400 $400 $400 Interest expense $ $ $ Earnings before taxes $ $ $ Taxes (40% of earnings) $ $ $ Net earnings $ $ $ Return on stockholders’ equity % % % What happens to the return on the stockholders’ equity as the amount of debt increases? Why did the rate of interest increases in case C? The return on stockholders' equity as the firm becomes financially leveraged. The rate…
Fill in the table using the following information.Assets required for operation: $3,000Case A—firm uses only equity financingCase B—firm uses 30% debt with a 10% interest rate and 70% equityCase C—firm uses 50% debt with a 12% interest rate and 50% equityIf your answer is zero, enter "0". Round your answers for monetary values to the nearest cent. Round your answers for percentage values to one decimal place. A B C Debt outstanding $ $ $ Stockholders' equity $ $ $ Earnings before interest and taxes $660.00 $660.00 $660.00 Interest expense $ $ $ Earnings before taxes $ $ $ Taxes (40% of earnings) $ $ $ Net earnings $ $ $ Return on stockholders’ equity % % % What happens to the rate of return on the stockholders' investment as the amount of debt increases? The rate of return on the stockholders' investment as the amount of debt increases.
Assume the following relationships for the Caulder Corp.: Sales/Total assets 2.2x Return on assets (ROA) 6% Return on equity (ROE) 15% a. Calculate Caulder's profit margin assuming the firm uses only debt and common equity, so total assets equal total invested capital. Round your answer to two decimal places. % b. Calculate Caulder's debt-to-capital ratio assuming the firm uses only debt and common equity, so total assets equal total invested capital. Do not round intermediate calculations. Round your answer to two decimal places. %
1.If Gwen, Inc. has a total debt ratio of 0.8, a total asset turnover of 0.33, and a net profit margin of 10%. Calculate the return on equity (ROE). Enter percentages as decimals and round to 4 decimals.
Assume that you are a consultant to Morton Inc., and you have been provided with the following data: D0 - $1.4: PO - $36; and g - 4.8% (constant). What is the cost of equity from retained earnings based on the DCF approach? OO Ⓒ948% 8.88% Go htt
You've collected the following information about Caccamisse, Incorporated: Sales Net income Dividends Total debt Total equity = a. Sustainable growth rate b. Additional borrowing c. Growth rate = = = = $ 330,000 $ 18,700 $ 7,500 $ 70,000 $ 101,000 a. What is the sustainable growth rate for the company? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. Assuming it grows at this rate, how much new borrowing will take place in the coming year, assuming a constant debt-equity ratio? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. What growth rate could be supported with no outside financing at all? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. % %
For the Year Ended December 31, 2019: $ 30,200 11,300 6,000 $ 12,900 3,200 Net revenues Cost of services provided Depreciation expense Operating income Interest expense Вook Income tax expense 3,500 Net income $ 6,200 At December 31, 2019: Print Assets $ 3,200 9,500 83,400 Cash and short-term investments Accounts receivable, net Property, plant, and equipment, net rences Total assets $ 96,100 Liabilities and Stockholders' Equity Accounts payable Income taxes payable Notes payable (long term) Paid-in capital Retained earnings $ 1,600 1,700 49,400 14,000 29,400 Total liabilities and stockholders' equity $ 96,100

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