Questions from Corporate Finance

Q: Calculate the degree of total leverage (DTL) and break‐

Calculate the degree of total leverage (DTL) and break‐even point for a company, given the following information: sales are $400,000; variable cost is $130,000; net income is $180,000; tax rate ( T )...

Q: The firm has 200 million shares outstanding. What is the firm

The firm has 200 million shares outstanding. What is the firm ’ s year 2 earnings per share?

Q: Using the DuPont system, what are Excelsior Inc. ’ s

Using the DuPont system, what are Excelsior Inc. ’ s net profit margin, asset turnover, and leverage ratio in year 2?

Q: Use the total “Dividends paid” figure from the firm ’

Use the total “Dividends paid” figure from the firm ’ s cash flow statement (Figure 3‐6) and your answer to Practice Problem 40 to estimate the dividends per common share outstanding for 2014.

Q: The large competitor firm mentioned in Practice Problem 19 had net operating

The large competitor firm mentioned in Practice Problem 19 had net operating income of $4.426 million and sales of $30.16 million in its most recent accounting period. Find the operating margin for th...

Q: One key part of ROE in the DuPont system is the return

One key part of ROE in the DuPont system is the return on assets (ROA). Find the ROA for Finns ’ Fridges for both years and determine if it is increasing or decreasing.

Q: A firm ’ s net earnings are $85 million and it

A firm ’ s net earnings are $85 million and it has 60 million shares outstanding. Determine its earnings per share.

Q: The balance sheet for a small firm shows total assets of $

The balance sheet for a small firm shows total assets of $529,500 and total liabilities of $379,000. What is the shareholders ’ equity?

Q: Mrs. Kwan lives in Ontario. Her annual salary is $

Mrs. Kwan lives in Ontario. Her annual salary is $225,000. What is the marginal tax on her salary?

Q: The balance sheet for a small corporation shows total assets of $

The balance sheet for a small corporation shows total assets of $525,600, common equity of $136,000, and retained earnings of $75,000. Calculate the total liabilities.