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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 Summary

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

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

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