Assignment #3 - Cost of Equity CAPM

Probler FINANC Exercises Exercise 01 Solve the following problems: Write your anşwers with solutions on the extra shoet provided at the end part of the module. Instructions: Problem 1 Income b. HORIZONTAL ANALYSIS. Smith Corporation provides the following comparative equity in t is $35. income statement: Smith Corporation Requirem Calculate t Comparative Income Statement For the Years Ended December 31, 20X3 and 20X2 20X2 20X3 a. Net im $680.000 b. Prefer $570.000 c. Retur d. Times 170,000 Sales 200,000 $510.000 Cost of goods sold $370.000 e. Earnim f. Price/e g. Book v 210.000 Gross profit Operating expenses 100,000 $300,000 $270,000 EBIT Problem 5 Requirement: Calculate the percentage change using horizontal analysis and evaluate the results. ACCOUNTS accounts rS statement Lome Problem 2

Net working capital, working capital balances, and the current ratio Study the following balance sheet to help you prepare for your upcoming interview for an entry-level analyst position at Tun Fuels Corporation. Tun Fuels Corporation Balance Sheet           Cash $1,293,750   Accounts payable $3,105,000 Accounts receivable $4,528,125   Accruals $1,940,625 Inventory $7,115,625   Notes payable $2,716,875 Total current assets $12,937,500   Total current liabilities $7,762,500       Long-term debt $5,737,500         Total debt $13,500,000       Common equity $2,700,000 Net plant and equipment $9,562,500   Retained earnings $6,300,000         Total equity $9,000,000 Total assets $22,500,000   Total liabilities and equity $22,500,000   During your interview for an introductory-level analyst position at Tun Fuels Corporation, the interviewer asks you to complete the following table using the information provided in the preceding balance sheet.…

please answer within the format by providing formula the detailed workingPlease provide answer in text (Without image)Please provide answer in text (Without image)Please provide answer in text (Without image)     How do I find “Return on Equity” when all I have are these numbers: profit margin 8.90% capital intensity ratio 0.50 debt equity ratio 0.65 net income 100,000.00 dividends 47,500.00

Frozen Food Products Cost of Capital Case Assignment This case is due at the beginning of the next class period Please create 2 copies of your answers, one copy to turn in, and one copy to keep for yourself 1 Calculate the unlevered beta (bU) for each of the comparable firms that are in the same industry as Frozen Foods Products 2 Calculate the industry median unlevered beta 3 Estimate the industry discount rate (rU) using the unlevered beta 4 Calculate the operating cash flows, inc

a. Enumerste four (4) factors to consider in analyzing the domestic economy as part of fundamental analysis. - b. Distinguish between time limit orders and Limit orc c. Explain the following Investment ratios and indicate how they are computed: Eanings per share (EPS) and Price/Earnings ratio (P/E). d. What is market efficiency? Differentiate between weak and semi strong form efficiency e. Next Pharmacy Ltd, an all equity finance company has started the production of a vaccine against COVID-19. The popularity of the vaccine is such that it expects to pay its shareholders dividends of g150 which grows steadily at 10%. The company has a beta of 1.75. The risk-free rate is 5% and the expected return on the market is 18.34%. Required: Calculate the stock's required rate of return and price per share.

pter 4 Problem Solving.pdf Open with Google Docs Problem 4-10 page 112 RATIO CALCULATIONS Assume the following relationships for the Brauer Corp Sales total assets Retum on assets ROA) Return onequity (ROE) Calculate Brauer's puofit margin and debt iratio. Solation

Exercise 4-19A (Algo) Using common size statements and ratios to make comparisons LO 4-8 The following information is available for the Memphis and Billings companies: Memphis $ 1,212,000 800,000 336,000 1,440,000 380,000 Sales Cost of goods sold Operating expenses Total assets Stockholders' equity Required: a. Prepare a common size income statement for each company. b. Compute the return on assets and return on equity for each company. c. Which company is more profitable from the stockholders' perspective? d. One company is a high-end retailer, and the other operates a discount store. Which is the discounter? Complete this question by entering your answers in the tabs below. Billings $ 1,150,640 878,000 229,320 1,330,000 380,000 Required A Required B Required C Required D Prepare a common size income statement for each company. Note: Round percentage answers to 1 decimal place. MEMPHIS COMPANY AND BILLINGS COMPANY Common Size Income Statements Memphis % $ 0 0 0.0 Billings 0.0 $…

Exercise 11-5 (Static) Identify information used in an investment decision Look forward to the day when you will have accumulated $5,000, and assume that you have decided to invest that hard-earned money in the common stock of a publicly owned corporation.Required: What data about that company will you be most interested in? How will you arrange those data so they are most meaningful to you? What information about the company will you want on a weekly basis, on a quarterly basis, and on an annual basis? How will you decide whether to sell, hold, or buy some more of the firm's stock?

The following information is given with respect to the ratio of two companies                                                                                         Aman LTD                                    Roger LTD   Current Ratio              2:01          1.60:1 Quick Ratio             1.35:1           1:01 Returns On investment              15%            13% Debt Equity Ratio              2:5:1            1:01     Define the concepts of Current and Quick ratio’s and also, reflect on your understanding towards the financial performance of the companies by looking to the above information?                    3 b. Define the terms- Return on Investment and Debt equity ratio and also, reflect on your understanding towards the financial performance of the companies?

D O Assume that Kish Inc. hired you as a consultant to help estimate its cost of capital. You have obtained the following data: Do = $0.90; Po = $47-50; and g = 7.00% (constant). Based on the DCF approach, what is the cost of equity from retained earnings? Do not round your intermediate calculations. a. 2.03% b. 8.77% O c. 9.03% O d. 8.89% O e. 2.17% Q Search B G 8 40 E hp X Dropbox promotion fo 25 alt a W ctri *** prisc X delete backspace pause home

Problem 19: Laiho Industries’s 2017 and 2018 balance sheets (in thousands of dollars are shown). Please show all work, INCLUDING FORMULAS AND HOW YOU GOT EACH PIECE OF THE FORMULA. If using EXCEL, please show where you got any numbers from. For example, for letter E. e. Assume the firm’s after-tax cost of capital is 10.5%. What is the firm’s 2018 EVA? EVA= EBIT(1-T)-(Total invested capital x After-tax percentage cost of capital) How did you find the total invested capital. I posted this questions numerous times, and it seems that for the last couple questions people are using informatiojn from 2017 and not 2018. Please USE CORRECT INFORMATION. Please also explain why you are using the calculations that you have used.  a. Sales for 2018 were $455,150,000, and EBITDA was 15% of sales. Furthermore, depreciation and amortization were 11% of net fixed assets, interest was $8,575,000, the corporate tax rate was 40%, and Laiho pays 40% of its net income as dividends. Given this information,…

As a business valuation expert, you have been allotted with the project to estimate the cost of equity for Alton Holdings. Alton Holdings operates in three different business sectors - Entertainment, Hotels, and Travel Services. The table beneath gives the information you collected both for the firm and for other comparable firms in each business sector. i. ii. iii. Business Sector Entertainment Hotel Travel Alton Holdings Sales Revenues €500 million €500 million €950 million Unlevered beta 0.95 1.15 Comparable Firms 1.45 Value/Sales Revenues 2.5 3.5 1.5 Estimate the (bottom-up) unlevered beta for Alton Holdings. Assume that Alton Holdings has no market-traded debt but €1.3 billion in book debt, an interest expense of €75 million per year, maturity 5 years and corporate bonds with the same credit rating as Alton Holdings yield 7.5%. Estimate the market value of debt of Alton Holdings. Assume next that Alton Holdings has 100 million shares trading at €12 per share. The tax rate is 40%.…

MANCOSA POSTGRADUATE DIPLOMA IN PRORCT MANAGEMENT QUESTION REQUIRED Use the information provided below to calculate the following ratios. Where applicable, und e answers to two decimal places 111 Gross profe margin 312 Operating profit margin 31.3 invertory turnover period 31.4 Trade recelvatles peried 31.5 Trade payables period 31 316 Current ratio 3.1.7 Acid test ratio 3.18 Return on capital employed 32 Comment on the control ef debtors by Saturn imited Sugpest TWO 2) ways in which Saturn Limited can improve its operating profit margin. 33 INFORMATION Excerpts of financial data of Satum Limited for 2019 are as follows: STATEMENT OF COMPREHINSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2019 2600 00 Cost of sales Gros proft Operating profit 1400 000 600 000 40 000 S60 00 Interest expense Proft before tas Tan N STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER: 2019 2008 ASSETS Non-current assets Inventories Accounts recelvable 780000 500 000 240 000 120 000 45L000 1250 p0 EQUITY AND…

Some recent financial statements for Smolira Golf, Incorporated, follow. Assets Current assets Cash Accounts receivable Inventory Total Fixed assets Net plant and equipment Total assets Sales Cost of goods sold Depreciation EBIT Interest paid Taxable income Taxes 2021 SMOLIRA GOLF, INCORPORATED 2022 Income Statement Net income Dividends Retained earnings $ 6,358 9,248 14,580 $ 30,186 $ 90,361 $ 120,547 Balance Sheets as 2022 $ 16,000 26,459 SMOLIRA GOLF, INCORPORATED of December 31, 2021 and 2022 Liabilities and Owners' Equity Current liabilities Accounts payable Notes payable Other $ 7,866 11,445 29,641 $ 48,952 $ 107,206 $ 156,158 287,318 220, 396 10,913 $ 56,009 2,264 $ 53,745 11, 286 $ 42,459 Total Long-term debt Owners' equity Common stock and paid-in surplus Accumulated retained earnings Total Total liabilities and owners' equity 2021 $ 4,880 3,959 198 $ 9,037 $ 32,100 $ 40,000 39,410 $ 79,410 $ 120,547 2022 $ 5,381 4,479 429 $ 10,289 $ 40,000 $ 40,000 65,869 $ 105,869 $ 156, 158

The Sunland Products Co. currently has debt with a market value of $300 million outstanding. The debt consists of 9 percent coupon bonds (semiannual coupon payments) which have a maturity of 15 years and are currently priced at $1,434.63 per bond. The firm also has an issue of 2 million preferred shares outstanding with a market price of $10 per share. The preferred shares pay an annual dividend of $1.20. Sunland also has 14 million shares of common stock outstanding with a price of $20.00 per share. The firm is expected to pay a $2.20 common dividend one year from today, and that dividend is expected to increase by 5 percent per year forever. If Sunland is subject to a 40 percent marginal tax rate, then what is the firm's weighted average cost of capital? Eyeol Template

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.

question 1 a) (img 60) find: 1. gross profit margin 2. stock turn over 3. net profit margin 4. return on capital employment 5. current ratio 1b)The following figures are from a similar company. C services Limited for the year ended 31 December 2010 Gross profit margin                                                     25% Stock turnover ratio                                                    9 Net profit Margin                                                          10% Return on Capital employed                                            12.5% Current Ratio                                                                  1:1 Quick Ratio                                                                  0.5:1 Compare your results in a, ABB Engineering with those of b, CD Engineering Services Limited. As a result of your comparison which company do you think is more successful during the year. Give reasons for your answers.    6. quick ratio