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The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net
The following tables contain financial statements for Dynastatics Corporation. Although the company has not been growing, it now plans to expand and will increase net fixed assets ie assets net of depreciation by per year for the next years, and it forecasts that the ratio of revenues to total assets will reINCOME STATEMENT,
Figures in $ thousands
Revenue $
Fixed costs
Variable costs of revenue
Depreciation
Interest of beginningofyear debt
Taxable income
Taxes at
Net income $
Dividends $
Addition to retained earnings $
BALANCE SHEET, YEAREND
Figures in $ thousands
Assets
Net working capital $
Fixed assets
Total assets $
Liabilities and shareholders equity
Debt $
Equity
Total liabilities and shareholders equity $ main at Annual depreciation is of total Capital.
INCOME STATEMENT,
Figures in $ thousands
Revenue $
Fixed costs
Variable costs of revenue
Depreciation
Interest of beginningofyear debt
Taxable income
Taxes at
Net income $
Dividends $
Addition to retained earnings $
BALANCE SHEET, YEAREND
Figures in $ thousands
Assets
Net working capital $
Fixed assets
Total assets $
Liabilities and shareholders equity
Debt $
Equity
Total liabilities and shareholders equity $
Required:
a Produce an income statement for Assume that net working capital will equal of fixed assets.
a Produce a balance sheet for Assume that net working capital will equal of fixed assets.
b Now assume that the balancing item is debt and that no equity is to be issued. Prepare a completed pro forma balance sheet for
c Assume that the balancing item is debt and that no equity is to be issued, what is the projected debt ratio for
d Suppose that the cost of equity is and that at the end of Dynastatics shares are expected to sell at times net income. What would be the value today of the firm's equity? Need Firm Value with Debt Ratio and Need Equity
I have answered all but D Please help with D
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