Question
Assume that a public corporation has 2,500,000 shares outstanding and faces a marginal tax rate of 27.5%. Also, assume this corporation: (a) plows-back 40% of
Assume that a public corporation has 2,500,000 shares outstanding and faces a marginal tax rate of 27.5%. Also, assume this corporation: (a) plows-back 40% of its net income into the firm for reinvestment and (b) has Gross Income of between $60,000,000 and $70,000,000 million for the last reporting period. Create the necessary Balance Sheets and Income Statement and then calculate the annual Cash Flow from Assets (aka: CFFA or Free Cash Flows (FCF)). A constraint here, however, is that your CFFA must range between $6,000,000 and $8,000,000 annually.
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