Fundamentals of Corporate Finance (4th Edition) (Berk, DeMarzo & Harford, The Corporate Finance Series)
4th Edition
ISBN: 9780134475561
Author: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Publisher: PEARSON
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Textbook Question
Chapter 2, Problem 37P
Some
- What change in the book value of the company's equity took place at the end Of 2015?
- Is the company's market-to-book ratio meaningful? Is its book debt-equity ratiomeaningful? Explain.
- Find the company's other financial statements from that time online. What was the cause of the change to its book value of equity at the end of 2015?
- Does the company's book value of equity in 2016 imply that it is unprofitable? Explain.
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Some balance sheet information is shown below: (all values in millions of dollars).
a. What change in the book value of the company's equity took place at the end of 2018?
b. Is the company's market-to-book ratio meaningful? Is its book debt-equity ratio meaningful? Explain.
a. What change in the book value of the company's equity took place at the end of 2018?
The book value of equity
▼
increased or decreased
by $_____ billion from the end of the previous year, and was
▼
positive or negative.
(Select from the drop-down menus and round to three decimal places.)
Consider the following financial statements (in millions of $). In 2016, the company did not pay any dividends. If this is the case, what was the retained earnings at the end of year 2015?
A) $ 1000 B) $ 974C) $ 842D) $ 868E) OTHER
(Analyzing coverage ratios) The income statements for Lowe's Companies, Inc. (LOW), spanning the period 2014-2016 (just before the housing crash, so these are representative years) are found here:
a. Calculate the times interest earned ratio for each of the years for which you have data.
b. What is your assessment of how the firm's ability to service its debt obligations has changed over this period?
Data Table
a. The times interest earned ratio for 2016 was
times. (Round to two decimal places.)
2016
2015
2014
The times interest earned ratio for 2015 was
times. (Round to two decimal places.)
$4,971,000
$4,792,000
$4,149,000
Net operating income (EBIT)
Interest expense
(516,000)
(476,000)
(552,000)
The times interest earned ratio for 2014 was
times. (Round to two decimal places.)
$4,419,000
$4,276,000
$3,673,000
Earnings before taxes
b. What is your assessment of how the firm's ability to service its debt obligations has changed over this period?
(1,870,000)
(1,580,000)
(1,390,000)…
Chapter 2 Solutions
Fundamentals of Corporate Finance (4th Edition) (Berk, DeMarzo & Harford, The Corporate Finance Series)
Ch. 2 - Prob. 1CCCh. 2 - Prob. 2CCCh. 2 - What 's depreciation designed to capture?Ch. 2 - Prob. 4CCCh. 2 -
5. what do a firm’s earning measure?
Ch. 2 - 6. What is dilution?
Ch. 2 - Prob. 7CCCh. 2 - Prob. 8CCCh. 2 - Prob. 9CCCh. 2 - What information do the notes to financial...
Ch. 2 - Prob. 11CCCh. 2 - Prob. 12CCCh. 2 - Prob. 13CCCh. 2 - Prob. 14CCCh. 2 - Prob. 15CCCh. 2 - Prob. 16CCCh. 2 - Prob. 1CTCh. 2 - Prob. 2CTCh. 2 - Prob. 3CTCh. 2 - 4. What is the purpose of the income statement?
Ch. 2 - Prob. 5CTCh. 2 - Prob. 6CTCh. 2 - Prob. 7CTCh. 2 - Prob. 8CTCh. 2 - Prob. 9CTCh. 2 - Prob. 10CTCh. 2 - Prob. 11CTCh. 2 - This is your second interview with a prestigious...Ch. 2 - Prob. 2DCCh. 2 - Prob. 3DCCh. 2 - Prob. 4DCCh. 2 - Prob. 5DCCh. 2 - Prob. 6DCCh. 2 - Prob. 7DCCh. 2 - Prob. 1PCh. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Consider the following potential events that might...Ch. 2 - Prob. 5PCh. 2 - Use EDGAR (www.sec.gov) to find Qualcomm's 10K...Ch. 2 - Prob. 7PCh. 2 - Prob. 8PCh. 2 - Prob. 9PCh. 2 - Prob. 10PCh. 2 - Prob. 11PCh. 2 - Prob. 12PCh. 2 - Prob. 13PCh. 2 - Prob. 14PCh. 2 - Prob. 15PCh. 2 - Prob. 16PCh. 2 - Prob. 17PCh. 2 - Prob. 18PCh. 2 - Prob. 19PCh. 2 - In December 2015, Apple had cash of $38.07...Ch. 2 - Prob. 21PCh. 2 - Prob. 22PCh. 2 - Local co. has sales of $10 million and cost of $6...Ch. 2 - 24. If Local Co., the company in Problem 23, had...Ch. 2 - Prob. 25PCh. 2 - Prob. 26PCh. 2 - Prob. 27PCh. 2 - Prob. 28PCh. 2 - Prob. 29PCh. 2 - Prob. 30PCh. 2 - Prob. 31PCh. 2 - Prob. 32PCh. 2 - Prob. 33PCh. 2 - Prob. 34PCh. 2 - Prob. 35PCh. 2 - Prob. 36PCh. 2 - Some balance sheet information is shown here (all...Ch. 2 - Prob. 38P
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