Fixed Costs EBIT Interest Expense EBT Taxes (21%) EAT #shares outstanding EPS 300,00 300,000 100,000 200,000 42,000 158,000 100,000 $1.58 Determine EPS if sales increase to $1,200,000. Then determine
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- The Cost of Equity and Flotation Costs Messman Manufacturing will issue common stock to the public for $30. The expected dividend and the growth in dividends are $3.00 per share and 5%, respectively. If the flotation cost is 10% of the issue’s gross proceeds, what is the cost of external equity, re?Reno Revolvere has an EPS of $1.50, a cash flow per share of $3.00, and a price/cash flow ratio of 8.0. What is its P/E ratio?Calculating the degrees of leverage Acme Inc. forecasts the following income statement for the next year: Income Statement For the Year Ended on December 31 Net sales $960,000 Less: Variable costs 532,000 Less: Fixed costs 123,000 EBIT, or NOI $305,000 Less: Interest 196,000 EBT $109,000 Less: Taxes 43,600 Net income $65,400 Acme Inc. uses no preferred stock in its capital structure. Calculate the degrees of operating, financial, and total leverage for Acme Inc. and select your answers in the following table. DOL 1.40 or 1.64 or 1.72 or 1.81 DFL 1.88 or 2.02 or 2.18 or 2.80 DTL 3.40 or 3.48 or 3.57 or 3.93
- Phoenix TV is forecasting the following income statement: Sales Operating costs excluding depr.& amort. EBITDA Depreciation & amortization EBIT Interest EBT Taxes (40%) Net income $8,000,000 4,400,000 $3,600,000 800,000 $2,800,000 600,000 $2,200,000 800,000 $1,320,000 The CEO would like to see higher sales and a forecasted net income of $2,500,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 10%. The tax rate, which is 40%, will remain the same. What level of sales would generate $2,500,000 in net income?If financial leverage of a firm is 4, Interest 6,00,000, Operating Leverage is 3, Variable cost to sales is 66.66%, Income tax rate is 30%, Number of Equity Shares 1, 00, 000. Calculate fixed cost and EPS of the firms. (For your reference, OL = Contribution/EBIT; FL = EBIT/EBT and CL = OL*FL)CO A has cash flows of $0.76 per share, earnings of $1.25 per share and 115,000 shares outstanding. Co B. is a comparable public company with a price of $S60 per share, cash flows of $2.14 per share, and 510,000 shares outstanding. If CoBis a sufficiently comparable company, what do you estimate Co B. price per share to be? Assume: Risk free rate 4% Market risk premium 7% Cost of debt 4%, beta of debt is 0. Tax rate 23%
- A firm has a profit margin of 15 percent on sales of GHS20,000,000. If the firm has debt of GHS7,500,000, total assets of GHS22,500,000, and an after-tax interest cost on total debt of 5 percent, what is the firm?s ROA? O A. 8.4% B. 10.9% O C. 12.0% D. 13.3% E. 15.1%The target company has sales of $2 million, net income of $1 million, and cash flows to equity of $1.1 million. The industry P/E ratio is 16.5. What is the valuation of the target company? Group of answer choices $18.15 million $33 million $16.5 million $10 millionABC Inc. has the following data. If it follows the residual dividend model, what is its forecasted dividend payout ratio? Capital budget % Debt Net income (NI) Select one: a. 49.20% b. 37.20% c. 31.60% d. 39.60% e. 40.00% $7,000 40% $7,000
