You are considering a new supplier that you estimate would reduce your costs 0.025, increasing overall EBIT margin the same amount, or 250 basis points. Tax burden 0.79 Interest burden 0.8 Operating margin Asset turnover 2.1 Leverage ratio 1.2 Equity 56 Before the changes are made the firm was intrinsically valued at 45.54 After the changes, what would the new value be assuming the new ROE, growth, and EPS The firm pays dividends as 0.61 of EPS. The discount rate is 0.15" O 64.88 O 70.24 O 62.35 O 67.36 0.08 O 73.13

Net Income (NI) could be thought of as earnings available for dividends to equity shareholders, assuming none is needed to sustain current operations without further growth. So, let us assume NI will be $500 in year 1 and $525 in year two.  Then, the company expects to sell this division for $3,000 at the end of year 3.  If the discount rate is 14%, what is the present value of this business division?

A company currently has a WACC of 10.6 percent and no debt. The tax rate is 21 percent. a. What is the company’s current cost of equity? b. If the firm converts to 40 percent debt with a cost of 6%, what will its cost of equity be? And the WACC? c. If the firm converts to 60 percent debt with a cost of 6% , what will its cost of equity be? And the WACC? d. What can you conclude from the values of the cost of equity and WACC obtained in b. and c. Please show excel formulas

Suppose the profitable company, Hermes, Inc., previously calculated its external financing needs (EFN) to be $18,200,000. What will happen to the EFN if management now decides to decrease the dividend payout ratio from 35.00% to 25.00%? (1) It will increase to some value greater than $18,200,000. (2) It will fall to some value lower than $18,200,000. (3) It will remain at $18,200,000. (4) The answer depends on Hermes, Inc.’s growth rate in sales. (5) The answer depends on Hermes, Inc.’s profit margin.

Consider a retail firm with a net profit margin of 3.15%​, a total asset turnover of 1.82​, total assets of ​$44.9 ​million, and a book value of equity of ​$17.4 million. c.​ If, in​ addition, the firm increased its revenues by 16% ​(maintaining this higher profit margin and without changing its assets or​ liabilities), what would be its​ ROE?

Cut off at the bottom is "Expansion percentage change in EPS". Thank you.

In the absence of any improvement in working capital efficiency or cycle, when the sales double, how much would the firm require for working capital? No change in working capital 50% of the current working capital 200% of the current working capital 150 of the current working capital

Current Ratio Explain what it means for a firm to have a current ratio equal to .50. Would the firm be better off it the current ratio where 1.50? What if it were 15.0? Explain your answers.

4. Rivoli Inc. hired you as a consultant to help estimate its cost of capital. You have been provided with the following data: D0 = $0.80; P 0 = $25.00; and g = 8.00% ( constant). Based on the DCF approach, what is the cost of equity from retained earnings? Do not round your intermediate calculations. a . 9.85% b. 14.32% c. 11.46% d . 9.74% e. 13.17%