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| Teaching Since: | May 2017 |
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| Questions Answered: | 66690 |
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Question 1 Julie Smith, an analyst with ABC Company, has collected the following data about the firm:
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EBITDA = $3.5 million
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Tax rate = 40%
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Debt outstanding = $3 million
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Cost of debt = 10.5%
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Cost of common equity = 14%
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Shares of stock outstanding = 800,000
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BV of the stock per share = $12
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The firm s product market is considered stable, and the firm expects no growth, and all earnings are paid out as dividends. Calculate the firm s earning per share, assuming depreciation & amortization costs of $500,000 per year.
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Question 2Lucent Technology is considering seller-finance for an existing customer with the following information. The net income is $110MM. The depreciation cost is $20MM. What is the subject firm's cash flow from operations (CFO)
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Question 3 H.R. Pickett Corporation has $500,000 of debt outstanding, and it pays an interest rate of 10% annually. The company s annual sales are $2 millions, and its average tax rate is 30%, and its profit margin on sales is 5%. What s Pickett s TIE ratio?
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Question 4 Use the following information on Dylan Enterprises for questions:
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1). What s the firm s net working capital for the current year? Show your calculation.
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2). What is Dylan's time interest earned (TIE) for the current year? Show your calculation.
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3). What is Dylan's retained earning for the current year? Show your calculation.
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4). Waht is Dylan's ROA for the current year?
5). DuPont model for profitability & ROE analysis: Calculate current year s ROE by showing the value of each individual component.
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