Assuming the time is now Jan 01, 2001. You have the following financial information on Boston Electronics. The estimated cost of capital is 10%. 2002 Boston Electronics Projected income statements ($mom) Year 2000 Sales 587.1 Cost of goods sold 358.1 Selling and admin. 64.6 Depreciation 88.1 EBIT 76.3 Taxes 25.9 0 Net income 504 2001 6102 378.3 67.1 91.5 73.2 149 0 48.3 2003 6890 434.1 75.8 103.4 6500 409.5 71.5 97.5 71.5 24.3 0 47.2 2004 730.3 460.1 80.3 109.6 80.2 27,2 75.8 25.8 0 Interest 500 53.0 Projected balance sheets (S million) 68.9 21.7 58.7 179 4110 487.6 61.0 180 427.1 507.1 65.0 20.5 455.0 540.5 Assets Accts receivable Inventory Property, plant, equip Total assets Liabs and equity Accts payable Equity Total liabs and equity 73.0 23.0 S11.2 607.3 572.9 60.0 48.9 438.7 487.6 50.9 4562 507.1 54.2 486.3 540,5 57.4 SISS $72.9 546.4 6073 Question 17. If BE decided to pay $25 million out of its 2004's profit as dividends to shareholders, what would be the 2004's plowback ratio? 52.83% 47.17% 50% 100% O You're going too far down. Bonus Question 4. What is BE's projected free cashflow for 2004? Your answer Question 18. If you decide to lower the payout rate in Question 17 because you think it is too high, how would it impact the market price BE's stock, all else equal? * Driving up stock price. O Driving down stock price. O No significant impact. Bonus Question 5. Can you explain your answer to Question 18? Your answer Assuming the time is now Jan 01, 2001. You have the following financial information on Boston Electronics. The estimated cost of capital is 10%. 2002 Boston Electronics Projected income statements ($mom) Year 2000 Sales 587.1 Cost of goods sold 358.1 Selling and admin. 64.6 Depreciation 88.1 EBIT 76.3 Taxes 25.9 0 Net income 504 2001 6102 378.3 67.1 91.5 73.2 149 0 48.3 2003 6890 434.1 75.8 103.4 6500 409.5 71.5 97.5 71.5 24.3 0 47.2 2004 730.3 460.1 80.3 109.6 80.2 27,2 75.8 25.8 0 Interest 500 53.0 Projected balance sheets (S million) 68.9 21.7 58.7 179 4110 487.6 61.0 180 427.1 507.1 65.0 20.5 455.0 540.5 Assets Accts receivable Inventory Property, plant, equip Total assets Liabs and equity Accts payable Equity Total liabs and equity 73.0 23.0 S11.2 607.3 572.9 60.0 48.9 438.7 487.6 50.9 4562 507.1 54.2 486.3 540,5 57.4 SISS $72.9 546.4 6073 Question 17. If BE decided to pay $25 million out of its 2004's profit as dividends to shareholders, what would be the 2004's plowback ratio? 52.83% 47.17% 50% 100% O You're going too far down. Bonus Question 4. What is BE's projected free cashflow for 2004? Your answer Question 18. If you decide to lower the payout rate in Question 17 because you think it is too high, how would it impact the market price BE's stock, all else equal? * Driving up stock price. O Driving down stock price. O No significant impact. Bonus Question 5. Can you explain your answer to Question 18? Your