Please assist me with the following questions for FIN 5378 homework. Show work (See Attached
1.New Hampshire Services reported $ 5.0 million of retained earnings on its December 31, 2007 balance sheet. In 2008, the company lost money; its net income was -$500,000 (negative $500,000). Despite the loss, the company still paid a $ 2.74 per share dividend. The company's earnings per share for 2008 were -$2.50 (negative $2.50). What was the level of retained earnings on the company's December 31, 2008 balance sheet? Show your answer to the nearest dollar. 2. The risk-free rate, kRF, is 6.6 percent and the market risk premium, (kM - kRF), is 5 percent. Assume that required returns are based on the CAPM. Your $1 million portfolio consists of $ 319 ,000 invested in a stock that has a beta of 0.7 and the remainder invested in a stock that has a beta of 0.8 . What is the required return on this portfolio? Enter your answer to the nearest .1%. 3. If a firms debt-to-equity ratio is 0.5 , what is its total debt to total asset ratio? Show your answer to the nearest .1%. 4. You hold a diversified portfolio consisting of a $10,000 investment in each of 15 different common stocks (i.e., your total investment is $150,000). The portfolio beta is equal to 0.8 . You have decided to sell one of your stocks which has a beta equal to 1.0 for $10,000. You plan to use the proceeds to purchase another stock which has a beta equal to 1.2 . What will be the beta of the new portfolio? 5. Lory Company has a total debt to total assets ratio of 45% and a current ratio of 4.1. The firm's stock sells for $ 127.2 per share. The total market value of the equity is $ 19.1 million. The market-to-book ratio is 1.0 . What is the book value per share? Show your answer to the nearest $.01. 6. You just graduated, and you plan to work for 10 years and then to leave for the Australian "Outback" bush country. You figure you can save $1,000 a year for the first 5 years and $2,000 a year for the next 5 years. These savings cash flows will start one year from now. In addition, your family has just given you a $5,000 graduation gift. If you put the gift now, and your future savings when they start, into an account which pays 8 percent compounded annually, what will your financial "stake" be when you leave for Australia 10 years from now? 7. You plan to buy a $220,000 house with a 20 year mortgage with a 4.8% nominal annual rate (=A.P.R.) Payments are monthly, interest is monthly compounded, and you did not make a down payment. Assume you make all payments on time, at the end of the month. Answer the following questions. a) How much is each monthly payment? [2 decimal places] b) How much interest will you pay with (=in) your 75th payment? [2 decimal places] c) Now assume you have made payments such that you only owe $150,000 on the mortgage. You decide to increase your payments by $100 per month. How many payments will it take to pay off your mortgage? 8. Match the numbers to the accounts on the below scrambled income statement balance sheet. Numbers are to the right of the account. Thus Gross Profit 2,313 means Gross Profit = $2313. Gross Profit 2,313 ; Other Long Term Liabilities 181 ; Stores and Distribution Expense 1,703 ; Cost of Goods Sold 1,430 ; Paid-In Capital 434 ; Retained Earnings 2,550 ; Total Stockholder's Equity 1,389 ; Income Before Taxes 99 ; Accounts Payable 141 ; Accrued Expenses 282 ; Net Income 52 ; Marketing, General and Administrative Expense 458 ; Change in Retained Earnings 46 ; Cash and Equivalents 520 ; Receivables 52 ; Class A Common Stock 1 ; Deferred Income Taxes (Current Asset) 16 ; Depreciation 30 ; Other Current Assets 116 ; Total Current Assets 1,164 ; Property and Equipment, net 968 ; Total Current Liabilities 487 ; Long-Term Portion of Borrowings, Net 291 ; Operating Income 114 ; Interest Expense, Net 15 ; Total Assets 2,505 ; Short-Term Portion of Deferred Lease Credits (current liability) 35 ; Leasehold Financing Obligations (Long Term Liability) 51 ; Long-Term Portion of Deferred Lease Credits (Long Term Liability) 106 ; Other Long Term Assets _________ ; Restructuring Charges ________ ; Dividends _________ ; Total Long Term Liabilities ________ ; Inventories ________ ; Net Sales _________ ; Tax Expense_______ ; Short-Term Portion of Borrowings, Net _________ ; Total Liabilities and Stockholder's Equity _________ ; Accumulated Other Comprehensive Loss, net of tax (an Equity account) _________ Question 21 options: 12345678910 Total Long Term Liabilities 1. 373 12345678910 Tax Expense 2. 8 12345678910 Total Liabilities and Stockholder's Equity 3. 6 12345678910 Dividends 4. 629 12345678910 Net Sales 5. 460 12345678910 Other Long Term Assets 6. 3743 12345678910 Accumulated Other Comprehensive Loss, net of tax (an Equity account) 12345678910 Inventories 12345678910 Restructuring Charges 12345678910 Short-Term Portion of Borrowings, Net 7. 47 8. 29 9. 2505 10 -1596 . 1.New Hampshire Services reported $ 5.0 million of retained earnings on its December 31, 2007 balance sheet. In 2008, the company lost money; its net income was -$500,000 (negative $500,000). Despite the loss, the company still paid a $ 2.74 per share dividend. The company's earnings per share for 2008 were -$2.50 (negative $2.50). What was the level of retained earnings on the company's December 31, 2008 balance sheet? Show your answer to the nearest dollar. 2. The risk-free rate, kRF, is 6.6 percent and the market risk premium, (kM - kRF), is 5 percent. Assume that required returns are based on the CAPM. Your $1 million portfolio consists of $ 319 ,000 invested in a stock that has a beta of 0.7 and the remainder invested in a stock that has a beta of 0.8 . What is the required return on this portfolio? Enter your answer to the nearest .1%. 3. If a firms debt-to-equity ratio is 0.5 , what is its total debt to total asset ratio? Show your answer to the nearest .1%. 4. You hold a diversified portfolio consisting of a $10,000 investment in each of 15 different common stocks (i.e., your total investment is $150,000). The portfolio beta is equal to 0.8 . You have decided to sell one of your stocks which has a beta equal to 1.0 for $10,000. You plan to use the proceeds to purchase another stock which has a beta equal to 1.2 . What will be the beta of the new portfolio? 5. Lory Company has a total debt to total assets ratio of 45% and a current ratio of 4.1. The firm's stock sells for $ 127.2 per share. The total market value of the equity is $ 19.1 million. The market-to-book ratio is 1.0 . What is the book value per share? Show your answer to the nearest $.01. 6. You just graduated, and you plan to work for 10 years and then to leave for the Australian "Outback" bush country. You figure you can save $1,000 a year for the first 5 years and $2,000 a year for the next 5 years. These savings cash flows will start one year from now. In addition, your family has just given you a $5,000 graduation gift. If you put the gift now, and your future savings when they start, into an account which pays 8 percent compounded annually, what will your financial "stake" be when you leave for Australia 10 years from now? 7. You plan to buy a $220,000 house with a 20 year mortgage with a 4.8% nominal annual rate (=A.P.R.) Payments are monthly, interest is monthly compounded, and you did not make a down payment. Assume you make all payments on time, at the end of the month. Answer the following questions. a) How much is each monthly payment? [2 decimal places] b) How much interest will you pay with (=in) your 75th payment? [2 decimal places] c) Now assume you have made payments such that you only owe $150,000 on the mortgage. You decide to increase your payments by $100 per month. How many payments will it take to pay off your mortgage? 8. Match the numbers to the accounts on the below scrambled income statement balance sheet. Numbers are to the right of the account. Thus Gross Profit 2,313 means Gross Profit = $2313. Gross Profit 2,313 ; Other Long Term Liabilities 181 ; Stores and Distribution Expense 1,703 ; Cost of Goods Sold 1,430 ; Paid-In Capital 434 ; Retained Earnings 2,550 ; Total Stockholder's Equity 1,389 ; Income Before Taxes 99 ; Accounts Payable 141 ; Accrued Expenses 282 ; Net Income 52 ; Marketing, General and Administrative Expense 458 ; Change in Retained Earnings 46 ; Cash and Equivalents 520 ; Receivables 52 ; Class A Common Stock 1 ; Deferred Income Taxes (Current Asset) 16 ; Depreciation 30 ; Other Current Assets 116 ; Total Current Assets 1,164 ; Property and Equipment, net 968 ; Total Current Liabilities 487 ; Long-Term Portion of Borrowings, Net 291 ; Operating Income 114 ; Interest Expense, Net 15 ; Total Assets 2,505 ; Short-Term Portion of Deferred Lease Credits (current liability) 35 ; Leasehold Financing Obligations (Long Term Liability) 51 ; Long-Term Portion of Deferred Lease Credits (Long Term Liability) 106 ; Other Long Term Assets _________ ; Restructuring Charges ________ ; Dividends _________ ; Total Long Term Liabilities ________ ; Inventories ________ ; Net Sales _________ ; Tax Expense_______ ; Short-Term Portion of Borrowings, Net _________ ; Total Liabilities and Stockholder's Equity _________ ; Accumulated Other Comprehensive Loss, net of tax (an Equity account) _________ Question 21 options: 12345678910 Total Long Term Liabilities 1. 373 12345678910 Tax Expense 2. 8 12345678910 Total Liabilities and Stockholder's Equity 3. 6 12345678910 Dividends 4. 629 12345678910 Net Sales 5. 460 12345678910 Other Long Term Assets 6. 3743 12345678910 Accumulated Other Comprehensive Loss, net of tax (an Equity account) 12345678910 Inventories 12345678910 Restructuring Charges 12345678910 Short-Term Portion of Borrowings, Net 7. 47 8. 29 9. 2505 10 -1596
