Use the following information to answer the following questions. All dollar amountmentioned below are in $thousands.Hong Kong Water Company is a beverage company that reported the following numbers (inSmillions) for the most recent fiscal year:RevenuesEBITDA●DAEBIT- Interest ExpensesTaxable IncomeTaxesNet IncomePayout$3,000$650$150$500$50During the year, the company reported capital expenditures of $250 million and an increase innon-cash working capital of $40 million. You can assume that its effective tax rate is the marginaltax rate. Assume that we know the following:$450$135$315$157.5The company's FCF will grow at 8% per year for the next five years.The company's current cost of capital is 12%, which will stay at that level for the next 5years.The company maintains a stable dividend policy, i.e., its payout ratio stays the same for allfuture years.• At the end of year 5, the company is expected to become a mature business, facing a costof capital of 8% (mature company levels). It will also maintain a constant debt-to-equityratio, and conduct no external equity financing.• At the end of year 5, the company is expected to have an ROE of 4%, and an ROA of 3%.(A) What is the FCF at year 3?(B) Estimate the company's terminal value at the end of year 5 from future FCFs (in millions)(C) Estimate the value of equity per share today (accurate to a certain range). You are given thefollowing information:outstanding.• The company has no equity warrantsThe total debt outstanding is $1 billion• The company's cash balance is $600 million and there are 150 million shares(D) In recent years, this company has greatly increased its current ratio. At the same time, thequick ratio has fallen. What has happened?

The issue you raised has to do with financial analysis and valuation, particularly with regard to…

Use the following information to answer the following questions. All dollar amount mentioned below are in Sthousands. Hong Kong Water Company is a beverage company that reported the following numbers (in Smillions) for the most recent fiscal year: Revenues EBITDA DA EBIT - Interest Expenses Taxable Income Taxes Net Income Payout $3,000 $650 $150 $500 $50 $450 $135 $315 $157.5 During the year, the company reported capital expenditures of $250 million and an increase in non-cash working capital of $40 million. You can assume that its effective tax rate is the marginal tax rate. Assume that we know the following: The company's FCF will grow at 8% per year for the next five years. The company's current cost of capital is 12%, which will stay at that level for the next 5 years.

Use the following information to answer the following questions. All dollar amount mentioned below are in Sthousands. Hong Kong Water Company is a beverage company that reported the following numbers (in Smillions) for the most recent fiscal year: Revenues EBITDA DA EBIT - Interest Expenses Taxable Income Taxes Net Income Payout $3,000 $650 $150 $500 $50 $450 $135 $315 $157.5 During the year, the company reported capital expenditures of $250 million and an increase in non-cash working capital of $40 million. You can assume that its effective tax rate is the marginal tax rate. Assume that we know the following: The company's FCF will grow at 8% per year for the next five years. The company's current cost of capital is 12%, which will stay at that level for the next 5 years.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

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During the past year, the company’s financial results reflected the following: Selling, general, and administrative expenses of 200,000 Net sales of 1,200,000 Interest expense of 100,000 Research & development expense of 50,000 Cost of goods sold of 800,000 Income tax expense of 17,500 Calculate gross profit % for the year. Calculate net profit $ for the year Calculate gross profit $ for the year. Calculate operating income $ for the year.
During the past year, the company’s financial results reflected the following: Selling, general, and administrative expenses of 200,000 Net sales of 1,200,000 Interest expense of 100,000 Research & development expense of 50,000 Cost of goods sold of 800,000 Income tax expense of 17,500 Calculate operating income $ for the year.
During the past year, the company’s financial results reflected the following: Selling, general, and administrative expenses of 200,000 Net sales of 1,200,000 Interest expense of 100,000 Research & development expense of 50,000 Cost of goods sold of 800,000 Income tax expense of 17,500 Calculate gross profit $ for the year.
The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively. What is Hidden Valley's return on assets? Multiple Choice 10%. 20%. 160%. 18%.
TSW Inc. had the following data for last year: Net income = $800; Net operating profit after taxes (NOPAT) = $700; Total assets = $3,000; and Total operating capital = $2,000. Information for the just-completed year is as follows: Net income = $1,000; Net operating profit after taxes (NOPAT) = $1,425; Total assets = $2,600; and Total operating capital = $2,500. How much free cash flow did the firm generate during the just-completed year?
Carter Paint Company has plants in four provinces. Sales last year were $100 million, and the balance sheet year-end is similar in percent of sales to that of previous years (and this will continue in the future). All assets and current liabilities will vary directly with sales. Assume the firm is already using capital assets at full capacity. Assets Cash Accounts receivable Inventory Current assets Capital assets Total assets Assets (Click to select) (Click to select) (Click to select) Current assets (Click to select) Total assets The firm has an aftertax profit margin of 9 percent and a dividend payout ratio of 35 percent. a. If sales grow by 20 percent next year, determine how many dollars of new are needed to finance the expansion. (Do not round intermediate calculations. Enter the answer in millions. Round the final answer to 3 decimal places.) The firm needs $ Current ratio Total debt / assets b. Prepare a pro forma balance sheet with any financing adjustment made to long-term…
TSW Inc. had the following data for last year: Net income = $800; Net operating profit after taxes (NOPAT) = $700; Total assets = $3,000; and Total operating capital = $2,000. Information for the just-completed year is as follows: Net income = $1,000; Net operating profit after taxes (NOPAT) = $750; Total assets = $2,600; and Total operating capital = $2,500. How much free cash flow did the firm generate during the just-completed year? Select the correct answer. a. $240 b. $260 c. $255 d. $245 e. $250
Using the AFN formula approach, calculate the total assets of Harmon Photo Company given the following information: Sales this year = $3,000; increase in sales projected for next year = 20%; net income this year = $250; dividend payout ratio = 40%; projected excess funds available next year = $100; accounts payable = $600; notes payable = $100; and accrued wages and taxes = $200. Except for the accounts noted, there were no other current liabilities. Assume that the firm’s profit margin remains constant and that the firm is operating at full capacity. $3,000 $2,200 $2,000 $1,200 $1,000
TSW Inc. had the following data for last year: Net income = $850; Net operating profit after taxes (NOPAT) = $700; Total assets = $2,800; and Total operating capital = $2,100. Information for the just-completed year is as follows: Net income = $1,200; Net operating profit after taxes (NOPAT) = $950; Total assets = $2,450; and Total operating capital = $2,350. How much free cash flow did the firm generate during the just-completed year? Group of answer choices $595 $770 $700 $630 $735
For the past year, Dog Pound, Incorporated, has sales of $47,162, interest expense of $4,166, cost of goods sold of $17,359, selling and administrative expense of $12,146, and depreciation of $6,995. If the tax rate is 21 percent, what is the operating cash flow? Multiple Choice O O $11,023 $13,816 $4,028 $16,293
Consider the following operating results for the past year for Sanitation Inc.: Sales = $22,561 Depreciation = $1,390 Interest Expense = $1,120 Costs $16,530 Tax Rate = 21 percent What was the company's operating cash flow (OCF)? =
Why are Old Men so Daggum Stubborn (OMDS) had the following information for the previous calendar year: Operating income: $66,880 Invested assets: $167,200 Sales: $836,000 What is OMDS' return on investment? For percentages, please enter your answer as a decimal (i.e., 20% is 0.20). For dollar amounts, please provide your answer to two decimal places (i.e. $3.00 is 3.00)

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