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