Questions from Corporate Finance

Q: What are the four primary disadvantages of the sole proprietorship and partnership

What are the four primary disadvantages of the sole proprietorship and partnership forms of business organization? What benefits are there to these types of business organization as opposed to the cor...

Q: A firm’s enterprise value is equal to the market value of its

A firm’s enterprise value is equal to the market value of its debt and equity, less the firm’s holdings of cash and cash equivalents. This figure is particularly relevant to potential purchasers of th...

Q: From the previous two questions, prepare a pro forma balance sheet

From the previous two questions, prepare a pro forma balance sheet showing EFN, assuming a 15 percent increase in sales, no new external debt or equity financing, and a constant payout ratio. Data fro...

Q: If the Baseball Shoppe has an 8 percent ROA and a 20

If the Baseball Shoppe has an 8 percent ROA and a 20 percent payout ratio, what is its internal growth rate?

Q: If the Garnett Corp. has a 15 percent ROE and a

If the Garnett Corp. has a 15 percent ROE and a 25 percent payout ratio, what is its sustainable growth rate?

Q: Based on the following information, calculate the sustainable growth rate for

Based on the following information, calculate the sustainable growth rate for Kaleb’s Kickboxing: Profit margin=8.2% Capital intensity ratio=.75 Debt–equity ratio=.40 Net income=$43,000 Dividends=$12,...

Q: Assuming the following ratios are constant, what is the sustainable growth

Assuming the following ratios are constant, what is the sustainable growth rate? Total asset turnover=2.50 Profit margin=7.8% Equity multiplier=1.80 Payout ratio=60%

Q: Seaweed Mfg., Inc., is currently operating at only 95 percent

Seaweed Mfg., Inc., is currently operating at only 95 percent of fixed asset capacity. Current sales are $550,000. How fast can sales grow before any new fixed assets are needed?

Q: For the company in the previous problem, suppose fixed assets are

For the company in the previous problem, suppose fixed assets are $440,000 and sales are projected to grow to $630,000. How much in new fixed assets are required to support this growth in sales? Assum...

Q: McCormac Co. wishes to maintain a growth rate of 12 percent

McCormac Co. wishes to maintain a growth rate of 12 percent a year, a debt–equity ratio of 1.20, and a dividend payout ratio of 30 percent. The ratio of total assets to sales is constant at .75. What...