Question 3 (30 Marks) Part! Green Food shows the following information on its 2019 financial statements Income Statement Sales Green Food Statement of Financial Position ASSETS Liabilities & Owners Equity Current Assets Current Liabilities Cash $ 398 Accounts Payable Accounts S8S Notes Payable Receivable Inventory Total Total $ 1,408 Long term debt $244 COGS Depreciate ERIT 976 5640 5857 Taxable Income Taxes Net Income $850 $ 287 $ 462 Owners' Equity Common Stock and paid in surplus Retained Earnings Total 2.041 $ 2,891 $2.980 Fixed Assets Net Plant & Equipment Total Assets Dividends S150 $312 $4.388 Total Liabilities & Owners' Equity 54.388 Addition to RE During the year, the firm issued S260 in new equity, and repurchased 380 outstanding long-term debt (a) What is the operating cash flow for the year? marks) (b) What is the cash flow to creditors for the year? (2 marks) (c) What is the cash flow to stockholders for the year? (2 marks) (d) Calculate the following ratios of the company: !!! !!! (1) Current ratio (1) Debt-to-equity ratio (2 mark) mark) mark) (1) Time interest earned (e) Calculate the return of equity (ROE) of the company by using the Du Poet analysis Partl a) What relationship does the agency theory examine in a firm? What are the associated problem costs of agency theory that would arise and affect the value of a firm? Why is more important in a public corporation than in a private corporation! Page 5 of 6 b) "The higher the standard deviation, the lower the risk premium should be? Do you agree? Explain based on systematic risk principle under CAPM