Question
hw4 (1) A firm has a profit margin of 15 percent on sales of $20,000,000. If the firm has debt of $7,500,000, total assets of
hw4
(1) A firm has a profit margin of 15 percent on sales of $20,000,000. If the firm has debt of $7,500,000, total assets of $22,500,000, and an after tax interest cost on total debt of 5 percent, what is the firms ROA?
(2) You are giving the following information. Shareholder Equity = $3.75 billion; price/earnings ratio = 3.5; common shares outstanding = 50 million; and market/book ratio = 1.9. Calculate the price of a share of common stock.
(3) Grass Trucking has $12 billion in assets, and its tax rate is 40 percent. Its Basic Earning Power (BEP) ratio is 15 percent, and its return on total assets (ROA) is 5 percent. What is its times-interest-earned (TIE) ratio?
(4) The following data apply to Kaiser Co. (in millions of dollars):
Cash & M.S. $100.00
Fixed Assets $283.50
Sales $1,000.00
Net Income $50.00
Current Liabilities $105.5
Current Ratio 3.0X
DSO (365 days) 40.55
ROE 12%
Calculate the following:
a. Accounts Receivable
b. Current Assets
c. Common Equity
d. Total Assets
e. ROA
f. Long-Term Debt
g. Inventory Turnover Ratio
h. Profit Margin
i. Debt Ratio
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