Sinaloa Appliance, Incorporated, a private firm that manufactures home appliances, has hired you to estimate the company's beta. You have obtained the following equity betas for publicly traded firms that also manufacture home appliances. Firm iRobot Middleby's National Presto Newell Brands Whirlpool Asset beta Beta 0.89 1.84 0.09 I 1.04 1.74 Debt $0 747 11,918 4,495 ($ millions) Market Value of Equity $ 2,990 7,410 794 a. Estimate an asset beta for Sinaloa Appliance. Note: Round intermediate calculations and final answer to 3 decimal places. 26,270 13,910
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- Triano Train Transports shows the following on their most recent balance sheet: Current Assets: 1871Total Liabilities: 1994Inventory: 458Net working Capital: 1111Total Assets: 3007Total Equity: 1636Total Debt: 2602Earnings per Share: 3.22Market Value: 60.03 You want to identify if the company is highly leveraged and therefore a higher risk for you as an investor. Specifically, you want to find out how much debt the company has in comparison to each dollar of equity. Determine which ratio to use, calculate it and put the number in the answer.For the following four IPOs, please find the total amount raised, the amount that went to the firm, and the amount that went to the underwriters/investment banks, and the gross spread. This information is available on the SEC Edgar database. Total S Amount S Raised by the SAmount Paid to S Offer S Bid Gross Raised Investment Banks Price Price Issuer Spread % Wingstop Shake Shack Alibaba WingstopYou are a consultant working with various companies that are considering incorporating and listing shares on a stock exchange. One of your clients asks you about the various acronyms she has been hearing in conjunction with financial analysis. Explain the following acronyms and how they measure different things but may complement each other: EPS (earnings per share), EBITDA (earnings before interest, taxes, depreciation, and amortization), and NOPAT (net operating profit after taxes).
- Use the internet to find a publicly-held companys annual report. Locate the section that comments on the Stockholders Equity section of the financial reports. What additional insights are you able to learn by looking further into the commentary? Is there anything that surprised you or that you think is missing and could help you if you were deciding whether to invest $100,000 of your savings in this companys stock?Topic: ISLAMIC INVESTMENT Answer all the following question?. Assume that you are the President of ABC Investments, a firm that invests in stock exchange markets worldwide. As president, you appointed investment Managers, Alam and Anas, to select shares that you would invest RM215,000 in each in January next year. Then, managers will manage shares and advise when to sell them, bearing in mind the objective to maximize return. Table 1 shows the data collected in the subsequent year. Investment manager Alam Anas Initial investment RM215,000 RM215,000 Sale value RM229,000 RM235,000 Holding period 4 months 7 months Dividends collected RM6,000 RM9500 Calculate the HPR for the stock of both Investment managers. What is the annualize HPR for Alam and Anas? Note: that the consumer price index (CPI) is a measure taken from examining the average of prices from a hypothetical basket of goods and services purchased by…You are an investment adviser. One of your clients approaches you for your advice on investing in equity sharesof Alpha Company. You have collected the following data:Earnings per share last year $5.00Payout ratio 0.30Return on equity 0.30Cost of equity capital 0.25The company plans to increase the payout ratio to 40% from year 6.Required:i) Estimate the price of an equity share of this company using an appropriate dividend discount modeland advise your client whether they should buy a share of the company.ii) Your client is keen to know whether there are any positive growth opportunities from theirinvestment. Explain to your client the meaning of this concept using appropriate calculations.
- 3. Below is a snapshot of some information about Microsoft Corporation from Yahoo! Finance on 10/16/2019. B) What is the Microsoft stock price and the market cap? C) Based on the information you collected in question (1), what is the total number of shares outstanding for Microsoft? (Hint: Market cap is the short name for “Market capitalization”. It represents the market value of a company’s total outstanding shares. It is equal to the stock price per share* total number of shares outstanding). D)What is Microsoft dividend payment and dividend yield?You are an investment adviser. One of your clients approaches you for your advice on investing inequity shares of Theta Company. You have collected the following data:Earnings per share last year $6.00Payout ratio 0.40Return on equity 0.30Cost of equity capital 0.20The company plans to increase the payout ratio to 60% from year 5.Required:i) Estimate the price of an equity share of this company using an appropriate dividenddiscount model and advise your client whether they should buy a share of the company.ii) Your client is keen to know whether there are any growth opportunities from theirinvestment. Explain to your client the meaning of this concept using appropriatecalculations.iii) If there are positive or negative growth opportunities, explain the reason for suchopportunities.You are the new CFO of Risk SurfingLtd, whichhas current assets of $7,920, net fixed assets of $17,700, current liabilities of $4,580 and long-termdebts of $5,890. Required:a.What are the three important questions of corporate financeyou will need to address? Please briefly explain them and indicate how they are related to the areas in the balance sheet of a company.b.Calculate owners’ equity and build a balance sheet for the company? c.How much is net working capital of the company? d.Calculatethe return on assets of the company giventhat Return on Equity is 30%?e.What is the PE of the company total number of ordinary share outstanding of the companies is 2,000 and market price of each share is $12?
- You are an investment adviser. One of your clients approaches you for your advice on investing in equity shares of Alpha Company. You have collected the following data: Earnings per share last year $6.00 Payout ratio 0.40 Return on equity 0.30 Cost of equity capital 0.20 The company plans to increase the payout ratio to 60% from year 5. Required: i) Estimate the price of an equity share of this company using an appropriate dividend discount model and advise your client whether they should buy a share of the company. ii) Your client is keen to know whether there are any positive growth opportunities from their investment. Explain to your client the meaning of this concept using appropriate calculations. Notes: You need to show detailed calculations in order to receive full marks for this question iii)If there are positive or negative growth opportunities, explain the reason for such opportunities.You are an investment adviser. One of your clients approaches you for your advice on investing in equity shares of Alpha Company. You have collected the following data: Earnings per share last year $4.00 Payout ratio 0.40 Return on equity 0.25 Cost of equity capital 0.20 The company plans to increase the payout ratio to 50% after year 5. Required: i) Estimate the price of an equity share of this company using an appropriate dividend discount model and advise your client whether they should buy a share of the company. ii) Your client is keen to know whether there are any positive growth opportunities from their investment. Explain to your client the meaning of this concept using appropriate calculations. Note: Use two decimal places in your calculationsYour friend, Leo, is considering investing in a newly listed company on the JSE, known as Abital Ltd. She comes to you for advice about whether to invest in their bonds or shares, and has collected the following information from the recently published financial statements: Number of outstanding shares 10 000 000 Earnings after tax 25 000 000 Retention ratio 35% Cost of equity 15% Current market price of one share R10 Number of Bonds outstanding 4 000 000 Abital Ltd recently acquired a patent that expires in 3 years. Their earnings are therefore expected to grow at 20% during these 3 years, after which it will decline to a constant 5%. What is the intrinsic value of Abital ltd?