Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Consider the following information that you propose to use to obtain an estimate of year 2004 EPS for the MacLog Company.

 

   

Estimated

 

Year 2019  

Year 2020

GDP

11,000 Billion

 

GDP growth

 

3.5%

Sales per share

$800

 

Operating profit margin

 

12%

Depreciation/Fixed Assets

 

14%

Fixed asset turnover

 

2

Interest rate

 

3.5%

Total asset turnover

 

0.7

Debt/Total assets

 

45%

Tax rate

 

36%

 

In addition, a regression analysis indicates the following relationship between growth in sales per share for MacLog, and GDP growth is

 

%Δ Sales per share = 0.015 + 0.75(%Δ GDP)

 

Refer to Exhibit 9.6. Calculate the firm's level of Total Assets per share for the year 2020.


 

a. $1,385.77

 

 

b. $1,113.58

 

 

c. $1,050.65

 

 

d. $1,065.67

 

 

e. $1,190.06

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