Please review, correct and answer in the attached excel document. Please show the equations as well as calculator answers.

Talbot enterprises recently reported an EBITDA of $8 Million and net income of $2.4 million. It had $2.0 million of interest expense, and its corporate tax rate was 40%. What was its charge for depreciation and amortization? EBT=NI/(1-TR) 4,000,000.00 TAX = EBT*TR 1,600,000.00 D&A = EBITDA - EBT 2,000,000.00 In its most recent financial statements, DelCastillo Inc. reported $70 million of net income and $900 million of retained earnings. The previous retained earnings were $855 million. How much in dividends did the firm pay to shareholders duri the year? Dividend paid = Beginning retained earnings + Net income of current year - Ending retained earnings $ 25,000,000.00 $900 million of retained rm pay to shareholders during ding retained earnings The Moore Corporation has operating income (EBIT) of $750,000. The company's depreciation expense is $200,000. Moor equity financed, and it faces a 40% tax rate. What is the company's net income. What is its net cash flow? Net Income = EBT - Tax Expenses $ 450,000.00 Net Cash Flow = Net Income + Depreciation $ 650,000.00 expense is $200,000. Moore is 100% t cash flow? Winston Watch's stock price is $75 per share. Winston has $10billion in total assets. Its balance sheet shows $1 billion in current liabilities, $3 billion in long-term debt, and $6 billion in common equity. It has 800 million shares of common stock outstanding. What is Winston's market/book ratio? Market value per share Common equity # of Shares Outstanding $ 75.00 $ 6,000,000.00 8,000,000.00 Market-to-book ratio = market value per share/(common equityumber of shares outstanding) Market-to-book ratio 10000 Market-to-book ratio 10 nce sheet shows $1 as 800 million shares The Nelson Company has $1,312,500 in current assests and $525,000 in current liabilities. Its initial inventory level is $375,000 raise funds as additional notes payable and use them to increase without pushing its current ratio below 2.0? What will be the ratio after Nelson has raised the maxium amount of short-term funds? Current Ratio = current asset current liabilities = 2.5 Current Ratio = current asset + NP current liabilities + NP = 2.0 = 1,312,500 + NP 525,000 + NP = 1,312,500 + NP = 1.19 2 1,050,000 + 2NP 2NP - NP NP Quick = 1,312,500 - 1,050,000 = 262,500 = current asset - Inventories current liabilities entory level is $375,000, and it will w 2.0? What will be the firm's quick If you deposit $10,000 in a bank account that pays 10% interest annually, how much will be in your account after 5 years? $16,105.10 Use both the TVM equations and a financial calculator to find the following values. See the Hint for Problrm 4-9. a. An initial $500 compounded for 10 years at 6% = PV(1 + I)10 = $500(1 +6%)10 = $895.42 $895.42 b. An initial $500 compounded for 10 years at 12% FV10 = PV(1 + I)10 = $500(1 + 12%)10 = $1,552.92 c. The present value of $500 due in 10 years at a 6% discount rate d. The present value of $500 due in 10 years at a 12% discount rate PV of $500 = 500 / (1+I) N = $500/ (1.06)2 = $446.43 $1,552.92 A mortgage company offers to lend you $85,000; the loan calls for payments of $8,273.59 at the end of each year for 30 years. What interest rate is the mortgage company charging you? Heath Food Corporation's bonds have 7 years remaining to maturity. The bonds have a face value of $1,000 and a yield to maturirty of 8%. They pay interest annually and have a 9% coupon rate. What is their current yield? Renfro Rentals has issued bonds that have a 10% coupon rate, payable semiannually. The bonds mature in 8 years, have face value of $1,000, and a yield to maturirty of 8.5%. What is the price of the bonds? You just purchased a bond that matures in 5 years. The bond has a face value of $1,000 and has an 8% annual coupon. The bond has a current yield of 8.21%. What is the bond's yield to maturity? CY=AI/CP .0821 = $80/PV PV= 974.4214 YTM= and has an 8% annual Suppose that the risk-free rate is 5% and that the market risk premium is 7%. What is the required return on (1) the market, (2) a stock with a beta of 1.0, and (3) a stock with a beta of 1.7? mRP = mR - rFR 1) 12.0% rR = rFR+Beta*mRP 2) 12.0% rR = rFR+Beta*mRP 3) 16.9% As an equity analyst you are concerned with what will happen to the required return to Universal Toddler's stock as market conditions change. Suppose rRF = 5%, rM = 12%, and bUT = 1.4. a. Under current conditions, what is rUT, the required rate of return oon UT stock? rUT=rRF+(rM-rRF)bUT 14.8% b. Now suppose rRF (1) increases to 6% or (2) decreases to 4%. The slope of the SML remains constant. How would this affect rM and rUT? 1) 2) 15.8% 13.8% c. Now assume rRF remains at 5% but rM (1) increases to 14% or (2) falls to 11%. The slope of the SML does not remain constant. How would these changes affect rUT? 1) 2) 17.6% 13.4% Stock R has a beta of 1.5, Stock S has a beta of 0.75, the expected rate of return on an average stock is 13%, and the risk-free rate is 7%. By how much does the required return on the riskier stock exceed that on the less risky stock? Risk free rate (Rf) = 7% Required Return (Re) = Rf +(Rm-Rf)B Required Return = 0.07+(0.13-0.07)B Stock R 16% Stock S 11.5% Stock R is more riskier than Stock S. Stock R has more beta than Stock S. 4.5%