1. Balloons Inc normally pays a quarterly dividend. The last such dividend paid was $1.55, all future quarterly dividends are expected to grow at 5 percent, and the firm faces a required rate of return on equity of 12 percent. If the firm just announced that the next dividend will be an extraordinary dividend of $2.75 per share that is not expected to affect any other future dividends, what should the stock price be?
2. Suppose that a company's equity is currently selling for $25.75 per share and that there are 3.7 million shares outstanding and 17 thousand bonds outstanding, which are selling at 96 percent of par. If the firm was considering an active change to their capital structure so that the firm would have a D/E of 1.7, which type of security (stocks or bonds) would they need to sell to accomplish this, and how much would they have to sell? (Round your intermediate ratio to 4 decimal places.)
3. Suppose that Freddie's Fries has annual sales of $510,000; cost of goods sold of $385,000; average inventories of $10,000; average accounts receivable of $26,000, and an average accounts payable balance of $21,000. Assuming that all of Freddie's sales are on credit, what will be the firm's cash cycle? (Round your answer to 2 decimal places.)
4. Scribble, Inc. has sales of $82,000 and cost of goods sold of $66,000. The firm had a beginning inventory of $12,000 and an ending inventory of $14,000. What is the length of the days' sales in inventory? (Round your answer to 2 decimal places.)
5. Elle Mae Industries has a cash balance of $63,000, accounts payable of $215,000; inventory of $255,000; accounts receivable of $315,000; notes payable of $223,000; and accrued wages and taxes of $53,000. How much net working capital does the firm need to fund?