P12-2A Greeve Corporation had the following stockholders' equity accounts on January 1, 2006: Common Stock ($1 par) $400,000, Paid-in Capital in Excess of Par Value $500,000, and Retained Earnings $100,000. In 2006, the company had the following treasury stock transactions. Mar. 1 Purchased 5,000 shares at $7 per share. Jun
ROE and capital structure. Ohio Quarry, Inc. which capital structure yields the highest variability (ie risk) in ROE?
Ohio Quarry, Inc. has $12,000,000 in assets. Its expected operating income (EBIT) is $2,000,000 and its income tax rate is 40%. If Ohio Quarry finances 20% of its total assets with debt capital, the pretax cost of funds is 10%. If the company finances 40% of its total assets with debt capital, the pretax cost of funds is 15%.
If the following ratios were computed before the change, what will be the new ROE if the new product is added and sales remain constant?
I am considering adding a new product to my firm's existing product line. It will cause a 15 percent increase in my profit margin (i.e., new PM = old PM ´ 1.15), but it will also require a 50 percent increase in total assets (i.e., new TA = old TA ´ 1.5). I expect to finance this asset growth entirely by debt. If the follow
A firm with 30% total debt ratio, total assets of $10 million, and an ROE of 11% has been paying out 60% of earnings to shareholders in the form of dividends. Sales are expected to increase by 15% this year, a faster growth rate than usual. Will external funding be required under these conditions? If so how much? Will the deb
Using Internet sources gather information on ROE and IRR. Post a two to three paragraph explanation for each of these terms and the advantages and disadvantages of using them when selecting projects to invest in overseas. Select two companies from the same industry. Using the annual report information available on the compan
A portfolio is entirely invested into Buzz's Bauxite Boring Equity, which is expected to return 16%, and Zum's Inc. bonds, which are expected to return 8%. Sixty percent of the funds are invested in Buzz's and the rest in Zum's. What is the expected return on the portfolio?
THIS IS PART OF THE QUESTION THAT WAS DONE IN POST 73836 Select two companies from the same industry. Using the annual report information available on the company's website compute the ROE for each company. However, I AM HAVING A DIFFICULT TIME CALCULATING These two companies were choosing Google (NASDAQ: GOOG) - 23.74
If you owned a business that had a net worth [shareholder's equity] of $600 million dollars and it made $36 million in profit What is the earning on the equity? What is the formula? Can it be written in percentage? What is the formula for IRR? CAN YOU GIVE AN EXAMPLE?
Financial calculations: return on assets, return on equity, sales-to-assets ratio, profit margin, rate of interest
1. Keller Cosmetics maintains a profit margin of 4 percent and a sales-to-assets ratio of 3. a. What is its return on assets? b. If its debt-equity ratio is 1.0, its interest payments and taxes are each $10,000, and EBIT is $40,000, what is the return on equity? 2. Sara Togas sells all its output to Federal Stores. The
See attached file. Could you please use the attached Income Statement and the Balance Sheet for fiscal years 2003 and 2002 to do a Du Pont analysis. Use income before the effect of changes in accounting principles for goodwill in your calculations. What factors caused the differences in ROE between 2003 and 2002. Wh
2 SEPARATE SCENARIOS: Keller Cosmetics maintains a profit margin of 4 percent and a sales-to-assets ratio of 3. What would its return on assets be (ROA) and how would you arrive at this answer? If its debt-equity ratio is 1.0, its interest payments and taxes are each $10,000, and EBIT is $40,000, what is the return on eq
I am having a problem answering the following two questions.. can any one please help me??? (Complete problem found in attachment) Morgan Inc (MI) bonds pay $110 annually, have 6 years until they mature and have a YTM of 9%. Book value of the bonds is $6.5 million. D/E ratio is 1.6. What is the market value of the equity
Devon Inc. has a higher ROE than Berwyn Inc. (17 percent compared to 14 percent), but it has a lower EVA than Berwyn. Which of the following factors could explain the relative performance of these two companies? a. Devon is much larger than Berwyn. b. Devon is riskier, has a higher WACC, and a higher cost of equity. c. Dev
A firm with sales of $1,000,000, net profits after taxes of $30,000, total assets of $1,500,000, and total liablilities of $750,000 has a return on equity of ________. 20 percent, 15 percent, 3 percent, or 4 percent please advise answer & why - thanks!
ROE Distributions (i.e. Calculating Expected Value and Standard Deviation) Here are the estimated ROE distributions for firms A, B, and C (see attachment) a. Calculate the expected value and standard deviation for Firm C'c ROE> ROE(A) = 10.0%, o(A) = 5.5%; ROE(B) = 12.0%, o(B) = 7.7% b. Discuss the relative riskiness of
Components of Return on Equity
Definition of Return on Equity (ROE) and its formula. An illustration on the calculation of ROE is included.
Calculating Return on Equity