Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need help with part D, please. The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now

I need help with part D, please.

image text in transcribedimage text in transcribed The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets (i.e., assets net of depreciation) by $200,000 per year for the next 5 years, and it forecasts that the ratio of revenues to total assets will remain at 1.50 . Annual depreciation is 10% of net fixed assets at the beginning of the year. Fixed costs are expected to remain at $68,000 and variable costs at 80% of revenue. The company's policy is to pay out twothirds of net income as dividends and to maintain a book debt ratio of 20% of total capital. d. Suppose that the cost of equity is 10% and that at the end of 2025 Dynastatics shares are expected to sell at 12 times net in What would be the value today of the firm's equity? Complete this question by entering your answers in the tabs below. Suppose that the cost of equity is 10% and that at the end of 2025 Dynastatics shares are expected to sell at 12 times net income. What would be the value today of the firm's equity? Note: Do not round your intermediate calculations. Round your final answers to the nearest whole dollar amount. Enter your answers in thousands

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions

Question

What are environmental impact statements?

Answered: 1 week ago