Value of Equity
Not what you're looking for?
A. Quanta, Inc. reported an after-tax profit margin of 3.50%, an asset turnover of 4.00 on net operating assets of $20.0 billion, and net financial obligations of $7.0 billion on January 31, 2000. Analysts expect that the sales of Quanta, Inc. will grow 8% on average in the future. Analysts also expect
1. If the profit margins and turnovers of Quanta, Inc. continue at their 2000 level and its cost of capital is 10%, what is the value of equity?
2. The shares of Quanta, Inc. were traded at a total market capitalization of $145 billion on January 31, 2000. If profit margins and turnovers were to continue at their 2000 level, what sales is the market forecasting for Quanta, Inc. in 2004?
Purchase this Solution
Solution Summary
The solutions answers the question(s) below.
Solution Preview
1. After Tax Profit Margin = 3.5%
Asset Turnover = 4
Net Operating Assets = 20 B
Sales = Asset Turnover * Net Operating Assets = 4*20 = 80B
Profits = 3.5% of 80B = 2.8 B
...
Purchase this Solution
Free BrainMass Quizzes
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.