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    Present value of cash flow / retained earnings

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    34.. Given the following information, calculate Retained Earnings for 2004.

    Dividend Payout Ration = 40%

    2004 Net Income = $5,150

    2003 Retained Earnings = $12,800

    35. Firms should finance long-term assets with short-term financing and short-term assets with long-term financing. TRUE FALSE

    36. Calculate the present value of the following cash flows using a discount rate of 12%.

    n ATCFs
    0 -120
    1 - 90
    2 +100
    3 +230
    4 +225
    5 +175
    6 +150
    7 to ∞ + 50

    39. A bond's yield to maturity is the _________________________ that makes the present value of the future cash flows of the bond equal to ________________.

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    Solution Preview

    34. Firms should finance long-term assets with short-term financing and short-term assets with ...

    Solution Summary

    A couple of financial questions regarding yield to maturity, retained earnings and dividends are answered here.

    $2.19

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