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Balance Sheet; Price of bonds, stock

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1. The following data apply to the Maryland Manufacturing Company:
debt ratio 60%
current ratio 2.1 x
total asset turnover 1.8 x
days sales outstanding 42 days based on a 365 day year
gross profit margin on sales 25% sales-cost of goods sold)/sales
inventory turnover ratio 4 x

Complete the balance sheet and sales information for the Maryland Manufacturing Company

Cash Accounts Payable
Accounts Receivable Long-term Debt $60,000
Inventories Common Stock
Fixed Assets Retained earnings $97,500
Total Assets $300,000 Total liabilities and equity

Sales Cost of Goods Sold

2) The Bethesda Fund is a $12 million portfolio of stock that you manage. The portfolio has a beta of 1.4 and a required rate of return of 15%. The current risk free rate is 4.05 percent. You have just received an addition $1,000,000 to add to the Bethesda Fund portfolio. You plan to invest the $1,000,000 in a stock that has a beta of 0.95. What will be the required return on the $13 million Bethesda Fund.

3) You are planning to purchase a Steven's Development Corporation 30 year bond with a par value of $1,000 and an annual coupon rate of 6%. You require a rate of return of 8 percent, and you plan to hold the bond for 5 years. You anticipate that in 5 years, the yield to maturity for this bond will be 7.4%. How much are you willing to pay for this bond today?

4a. The SJB Software Company has been growing at a rate of 25% per year in recent years. This same growth rate is expected to last for 5 more years at which time the normal growth rate will be 9%. The dividend today is $1.60 and the required rate of return is 12%. What is the price of the SJB Software Company stock today?
4b. Now, presume that the SJB Software Company did not pay any dividends on its 30 million shares of common stock. Instead, the company reinvested all of its earnings to expand the business. Based on the company's success, it estimated the free cash flow (in millions of $) by year for the following 10 years. After the 10th year free cash flow will grow by 9% annually. What is the estimated price today of the company's stock?

Year 1 2 3 4 5 6 7 8 9 10
Free Cash Flow $6.00 $12.00 $24.00 $48.00 $96.00 $125.00 $160.00 $105.00 $230.00 $180.00

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Information is on the excel spread sheet. Please put answers in cell and show how you arrived at answers.

Please provide your answers on this Excel spreadsheet underneath each question. When calculating your answers, please solve all equations to 2 decimal points.

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Answers questions on completing the balance sheet and sales information, required return on fund, price of bonds, price of stock etc.

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