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Problem #3 Your company's variable cost is 60% of Sales, where Sales is 200,000 and 300,000, for 2017 and 2018, respectively. Fixed cost is 40,000. The company also has Total Assets of 200,000 with 50-50 Debt-to-Asset ratio. Interest rate for any debt is 12% and the tax rate is 40%. Your company has 5,000 shares outstanding. a. Calculate the DOL, DFL, DTL b. What is the estimate EPS for 2018? Problem #4 Suppose that a company undertakes a project which requires an initial cash outlay of 50,000 and is expected to produce cash flows of 22,000 for 3 years. Assume that the company finances the project with 100% equity, has a current stock price of 15, intends to pay dividends of 1.50 next year, and the expected sustainable growth rate is 6%. The company's marginal tax rate is 35%. If flotation costs are 5% of the new equity capital raised, what is the cost of equity of the project using the two methods for accounting for flotation costs? Problem #5 BSAM's expected project cost is 2 million, its target capital structure is 55% debt and 45% equity, and its forecasted net income is 900000. If the company follows a residual dividend policy, what total dividends, if any, will it pay out? Problem #3 Your company's variable cost is 60% of Sales, where Sales is 200,000 and 300,000, for 2017 and 2018, respectively. Fixed cost is 40,000. The company also has Total Assets of 200,000 with 50-50 Debt-to-Asset ratio. Interest rate for any debt is 12% and the tax rate is 40%. Your company has 5,000 shares outstanding. a. Calculate the DOL, DFL, DTL b. What is the estimate EPS for 2018? Problem #4 Suppose that a company undertakes a project which requires an initial cash outlay of 50,000 and is expected to produce cash flows of 22,000 for 3 years. Assume that the company finances the project with 100% equity, has a current stock price of 15, intends to pay dividends of 1.50 next year, and the expected sustainable growth rate is 6%. The company's marginal tax rate is 35%. If flotation costs are 5% of the new equity capital raised, what is the cost of equity of the project using the two methods for accounting for flotation costs? Problem #5 BSAM's expected project cost is 2 million, its target capital structure is 55% debt and 45% equity, and its forecasted net income is 900000. If the company follows a residual dividend policy, what total dividends, if any, will it pay out