15. Doldrums Plastics has been paying a $3 dividend each year for two years and company reports indicate that management intends to continue this dividend payment for the foreseeable future. Current assets are $2 million. The market determined required rate of return on Doldrums's common stock is 15 percent What will be the price of a share of the common stock? Suppose that an aggressive new Chief Executive Officer, Dee Uamoca, is hired by Doldrums. Because of the productive policies and processes instituted by Uamoca, capital market investors anticipate that Doldrums's earnings and dividends will increase at a constant 8 percent rate beginning immediately. What would be the price of a share of Doldrums common stock if the required rate of return remains at 15 percent? Hint: Begin by determining D a. b. 16. The Sam Taylor Company is issuing preferred stock with the characteristics of a perpetuity and that will pay an annual dividend of $5. If you require a 12 percent return on the stock, what is the most you would be willing to pay for the stock? 17. A corporate bond with a $1,000 denomination and bearing a 10 percent coupon rate will mature in 10 years. The firm's beta is 1.2. If the current market rate of return is 8 percent for bonds of this nature, what is the current theoretical value of the bond (assume annual interest payments) 18. A corporate bond with a $1,000 denomination and bearing a 10 percent coupon rate will mature in 10 years. The firm's beta is 1.2. If the current market rate of return is 8 percent for bonds of this nature, what is the current theoretical value of the bond (assume semi- annual interest payments)? Just Do It, Inc. has current assets $50,000, net fixed assets of $200,000, long term liabilities of S100,000, and S100,000 in stockholder equity. All assets are classified as being either "current assets" or "fixed assets." The firm is in the 40% tax bracket. what is its current ratio? 19. Hangover Pills, Inc. has current assets of $70,000 and net fixed assets of $400,000. The firm's sales are $800,000. All assets are classified as being either "current assets" or "fixed assets." Hangover can borrow at 8%. What is Hangover's total asset turnover? 20. 21. Claim Denied Insurance Company's net fixed assets- $200,000, total assets $400,000 inventory $50,000 and current liabilities S100,000. All assets are classified as bein either "current assets" or "fixed assets." a. What is Claim Denied's current ratio? b. What is Claim Denied's quick (acid-test) ratio? 22. The Simpson's Corp. has operating profit of $200,000 on sales of $2,000,000. Simpson's 40% tax bracket. Simpson. does not have any preferred stock outstanding. What is Simpson's operating profit margin