Questions from Corporate Finance

Q: The 2020 balance sheet of Osaka’s Tennis Shop, Inc., showed

The 2020 balance sheet of Osaka’s Tennis Shop, Inc., showed $780,000 in the common stock account and $4.78 million in the additional paid-in surplus account. The 2021 balance sheet showed $965,000 and...

Q: The balance sheet for the Heir Jordan Corporation follows. Based on

The balance sheet for the Heir Jordan Corporation follows. Based on this information and the income statement in the previous problem, supply the missing information using the percentage of sales appr...

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 an increase in sales of 15 percent, no new external debt or equity financing, and a constant payout ratio. Pro...

Q: If Fairlane Co. has an ROA of 8.3 percent

If Fairlane Co. has an ROA of 8.3 percent and a payout ratio of 35 percent, what is its internal growth rate?

Q: If Premier Corp. has an ROE of 14.1 percent

If Premier Corp. has an ROE of 14.1 percent and a payout ratio of 25 percent, 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 Kayla’s Heavy Equipment: Profit margin = 7.3% Capital intensity ratio = .95 Debt-equity ratio = 1.05 Net income = $84,000...

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 = 3.20 Profit margin = 5.2% Equity multiplier = .95 Payout ratio = 35%

Q: Pinnacle Mfg., Inc., is currently operating at only 94 percent

Pinnacle Mfg., Inc., is currently operating at only 94 percent of fixed asset capacity. Current sales are $830,000. How fast can sales grow before any new fixed assets are needed?

Q: For the company in Problem 16, suppose fixed assets are $

For the company in Problem 16, suppose fixed assets are $590,000 and sales are projected to grow to $910,000. How much in new fixed assets are required to support this growth in sales? Assume the comp...

Q: Gamgee Co. wishes to maintain a growth rate of 11 percent

Gamgee Co. wishes to maintain a growth rate of 11 percent per year, a debt-equity ratio of .75, and a dividend payout ratio of 25 percent. The ratio of total assets to sales is constant at .65. What p...