The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.
| Balance Sheet (Millions of $) | 2021 |
| Assets | |
| Cash and securities | | $ | 4,200 | |
| Accounts receivable | | | 17,500 | |
| Inventories | | | 20,300 | |
| Total current assets | | $ | 42,000 | |
| Net plant and equipment | | | 28,000 | |
| Total assets | | $ | 70,000 | |
| |
| Liabilities and Equity | |
| Accounts payable | | $ | 27,531 | |
| Accruals | | | 12,369 | |
| Notes payable | | | 5,000 | |
| Total current liabilities | | $ | 44,900 | |
| Long-term bonds | | | 9,000 | |
| Total liabilities | | $ | 53,900 | |
| Common stock | | | 3,864 | |
| Retained earnings | | | 12,236 | |
| Total common equity | | $ | 16,100 | |
| Total liabilities and equity | | $ | 70,000 | |
| |
| Income Statement (Millions of $) | 2021 |
| Net sales | | $ | 112,000 | |
| Operating costs except depreciation | | | 104,160 | |
| Depreciation | | | 2,240 | |
| Earnings before interest and taxes (EBIT) | | $ | 5,600 | |
| Less interest | | | 840 | |
| Earnings before taxes (EBT) | | $ | 4,760 | |
| Taxes (25%) | | | 1,190 | |
| Net income | | $ | 3,570 | |
| |
| Other data: | |
| Shares outstanding (millions) | | | 500.00 | |
| Common dividends (millions of $) | | $1,249.50 | |
| Int. rate on notes payable & L-T bonds | | | 6% | |
| Federal plus state income tax rate | | | 25% | |
| Year-end stock price | | | $85.68 | |
What is the firm's equity multiplier? Do not round your intermediate calculations.
Shemar and Zehra are saving for their daughter Trinity's college education. Trinity just turned 10 (at t = 0), and she will be entering college 8 years from now (at t = 8). College tuition and expenses at State U. are currently $16,500 a year, but they are expected to increase at a rate of 4.0% a year. Trinity should graduate in 4 years--if she takes longer or wants to go to graduate school, she will be on her own. Tuition and other costs will be due at the beginning of each school year (at t = 8, 9, 10, and 11). So far, Shemar and Zehra have accumulated $18,000 in their college savings account (at t = 0). Their long-run financial plan is to add an additional $5,000 in each of the next 4 years (at t = 1, 2, 3, and 4). Then they plan to make 3 equal annual contributions in each of the following years, t = 5, 6, and 7. They expect their investment account to earn 9%. How large must the annual payments at t = 5, 6, and 7 be to cover Trinity's anticipated college costs?
Your father is about to retire, and he wants to buy an annuity that will provide him with $51,000 of income a year for 25 years, with the first payment coming immediately. The going rate on such annuities is 4.40%. How much would it cost him to buy the annuity today?
Brown Fashions Inc.'s December 31, 2020 balance sheet showed total common equity of $4,050,000 and 195,000 shares of stock outstanding. During 2021, the firm had $350,000 of net income, and it paid out $100,000 as dividends. What was the book value per share at 12/31/21, assuming no common stock was either issued or retired during 2021? (Round your final answer to two decimal places.)
Bob has $1,900 invested in a bank that pays 5.8% annually. How long will it take for his funds to double?
