Questions from Corporate Finance

Q: A firm wishes to maintain a growth rate of 11.5

A firm wishes to maintain a growth rate of 11.5 percent and a dividend payout ratio of 30 percent. The ratio of total assets to sales is constant at .60, and profit margin is 6.2 percent. If the firm...

Q: A firm wishes to maintain an internal growth rate of 7 percent

A firm wishes to maintain an internal growth rate of 7 percent and a dividend payout ratio of 25 percent. The current profit margin is 5 percent, and the firm uses no external financing sources. What...

Q: Can our goal of maximizing the value of the stock conflict with

Can our goal of maximizing the value of the stock conflict with other goals, such as avoiding unethical or illegal behavior? In particular, do you think subjects like customer and employee safety, the...

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

Based on the following information, calculate the sustainable growth rate for Hendrix Guitars, Inc.: Profit margin=4.8% Total asset turnover=1.25 Total debt ratio=.65 Payout ratio=30%

Q: You’ve collected the following information about St. Pierre, Inc.:

You’ve collected the following information about St. Pierre, Inc.: Sales=$195,000 Net income=$17,500 Dividends=$9,300 Total debt=$86,000 Total equity=$58,000 What is the sustainable growth rate for St...

Q: Coheed, Inc., had equity of $135,000 at

Coheed, Inc., had equity of $135,000 at the beginning of the year. At the end of the year, the company had total assets of $250,000. During the year the company sold no new equity. Net income for the...

Q: Calculate the internal growth rate for the company in the previous problem

Calculate the internal growth rate for the company in the previous problem. Now calculate the internal growth rate using ROA × b for both beginning of period and end of period total assets. What do yo...

Q: The most recent financial statements for Moose Tours, Inc., follow

The most recent financial statements for Moose Tours, Inc., follow. Sales for 2009 are projected to grow by 20 percent. Interest expense will remain constant; the tax rate and the dividend payout rate...

Q: In the previous problem, suppose the firm was operating at only

In the previous problem, suppose the firm was operating at only 80 percent capacity in 2008. What is EFN now?

Q: In Problem 25, suppose the firm wishes to keep its debt

In Problem 25, suppose the firm wishes to keep its debt– equity ratio constant. What is EFN now?