17

1. ABC Inc.'sstock is currently sellingfor $27.12 per share. The company just paid its first annual dividend of $1.55 a share. The firm plans to increase the dividend by3.8 percent per year indefinitely. What is the firms cost of equity?

   Enter your answer in percentages rounded off to two decimal points.

1 points

QUESTION 18

1. ABCCompany's last dividend was $2.6. The dividend growth rate is expected to be constant at 9% for 4 years, after which dividends are expected to grow at a rate of 5% forever. The firm's required return (r_s) is 16%. What is its current stock price (i.e. solve for Po)?

   Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box.For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 19

1. ABC Company has annual sales of $683,159. The cost of goods sold are $453,167. The firm has an accounts receivable balance of $17,158 and an accounts payable balance of $23,888. How many days does it take the firm to pay its suppliers? Assume 365 days.

   Enter your answer rounded off to two decimal points.

1 points

QUESTION 20

1. ABCs last dividend paid was $4.53, its required return is23%, itsgrowth rateis 4%.What is ABC's expected stock price in11 years?

   Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box.For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 21

1. XYZ Company's credit terms are 1/2 net 37. The company estimatesthat 20% of the customers will take the cash discount. What is the average collection period?

   Enter your answer rounded off to TWO decimal points.

1 points

QUESTION 22

1. Suppose that today's stock price is $38.63. If the required rate on equity is 18.6% andthe growth rate is 3.2%, compute the expected dividend (i.e. compute D1)

   Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box.For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 23

1. ABC Inc. last paid an annual dividend of $7.3.The dividends are expected to grow by 4.5% each year. What is the amount of expected dividend in Year 18. That is, what is D18?

   Enter your answer rounded off to two decimalpoints. Do not enter $ in the answer box.

1 points

QUESTION 24

1. At the start of the day, the ledger balance and the available balance for ABC Company was $8,394. During the day, the firm wrote two checks in the amounts of $607 and $459. The firm deposited two checks: one check for $1,754 and another check for $1,258. What is the amount of the collection float as of the end of the day?

1 points

QUESTION 25

1. ABC Corp. currently has an inventory turnover of 11, a payables turnover of 8.24, and a receivables turnover of 13.07. How many days are in the operating cycle?

   Enter your answer rounded off to two decimal points.

1 points

QUESTION 26

1. The common stock of ABC Industries is valued at $88.15 a share. The company increases their dividend by5.6 percent annually and expects their next dividend to be $2.79. What is the required rate of return on this stock?

   Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 27

1. ABC Company has annual sales of $152,643 and cost of goods sold of $56,692. The average accounts receivable balance is $37,842. How many days on average does it take the firm to collect its accounts receivable? That is, what is the AR Period?

   Assume 365 days.

   Enter your answer rounded off to two decimal points

1 points

QUESTION 28

1. ABCCompany writes37checks a day for an average amount of$234each.These checks generally clear the bank in7days.In addition,the firmgenerally receives an average of$10,806a day in checks that aredeposited immediately.Deposited funds are available in1days.Whatis the firm's netfloat?