You are considering a stock investment in one of two firms (AllDebt, Inc. and AllEquity, Inc.), both of which operate in the same industry and have identical operating income of $3 million. AllDebt, Inc. finances its $6 million in assets with $5 million in debt (on which it pays 5 percent interest annually) and $1 million in equity. AllEquity, Inc. finances its $6 million in assets with no debt and $6 million in equity. Both firms pay a tax rate of 40 percent on their taxable income. What are the asset funders' (the debt holders and stockholders) resulting return on assets for the two firms?
Which of these does NOT perform vital functions to securities markets of all sorts by channelling funds from those with surplus funds to those with shortages of funds?
The past five monthly returns for PG&E are 12.14 percent, −11.37 percent, 3.77 percent, 6.47 percent, and 3.58 percent. What is the average monthly return?
Use the following information to answer this question. Bayside, Inc.2017 Income Statement($ in thousands)Net sales$6270 Cost of goods sold 4640 Depreciation 400 Earnings before interest and taxes$1230 Interest paid 46 Taxable income$1184 Taxes 414 Net income$770 Bayside, Inc.2016 and 2017 Balance Sheets($ in thousands) 2016 2017 2016 2017 Cash$150 $255 Accounts payable$1735 $1805 Accounts rec. 1150 990 Long-term debt 890 690 Inventory 1825 2140 Common stock 3400 3360 Total$3125 $3385 Retained earnings 960 1210 Net fixed assets 3860 3680 Total assets$6985 $7065 Total liab. & equity$6985 $7065How many dollars of
Use the following information to answer this question.Windswept, Inc.2017 Income Statement($ in millions)Net sales$9400 Cost of goods sold 7650 Depreciation 440 Earnings before interest and taxes$1310 Interest paid 88 Taxable income$1222 Taxes 428 Net income$794 Windswept, Inc.2016 and 2017 Balance Sheets($ in millions) 2016 2017 2016 2017 Cash$220 $255 Accounts payable$1490 $1595 Accounts rec. 990 890 Long-term debt 1010 1335 Inventory 1660 1655 Common stock 3240 2970 Total$2870 $2800 Retained earnings 530 780 Net fixed assets 3400 3880 Total assets$6270 $6680 Total liab. & equity$6270 $6680What is the return on
Use the following information to answer this question. Windswept, Inc.2017 Income Statement($ in millions)Net sales$10,250 Cost of goods sold 8050 Depreciation 380 Earnings before interest and taxes$1820 Interest paid 104 Taxable income$1716 Taxes 515 Net income$1201 Windswept, Inc.2016 and 2017 Balance Sheets($ in millions) 2016 2017 2016 2017 Cash$300 $325 Accounts payable$1630 $1937 Accounts rec. 1150 1050 Long-term debt 1090 1278 Inventory 1820 1680 Common stock 3400 3050 Total$3270 $3055 Retained earnings 670 920 Net fixed assets 3520 4130 Total assets$6790 $7185 Total liab. & equity$6790 $7185Windswept, Inc.,
Use the following information to answer this question. Windswept, Inc.2017 Income Statement($ in millions)Net sales$8950 Cost of goods sold 7490 Depreciation 425 Earnings before interest and taxes$1035 Interest paid 94 Taxable income$941 Taxes 329 Net income$612 Windswept, Inc.2016 and 2017 Balance Sheets($ in millions) 2016 2017 2016 2017 Cash$170 $200 Accounts payable$1150 $1285 Accounts rec. 880 780 Long-term debt 1060 1280 Inventory 1640 1595 Common stock 3260 2960 Total$2690 $2575 Retained earnings 550 800 Net fixed assets 3330 3750 Total assets$6020 $6325 Total liab. & equity$6020 $6325What is the days' sales
Suppose that a company's equity is currently selling for $24.25 per share and that there are 3.1 million shares outstanding and 11 thousand bonds outstanding, which are selling at 92.5 percent of par. If the firm was considering an active change to their capital structure so that the firm would have a D/E of 0.4, which type of security (stocks or bonds) would they need to sell to accomplish this, and how much would they have to sell? (Round your intermediate ratio to 4 decimal places.)
The Green Giant has a 4 percent profit margin and a 35 percent dividend payout ratio. The total asset turnover is 1.70 times and the equity multiplier is 1.50 times. What is the sustainable rate of growth?
Jupiter Explorers has $7800 in sales. The profit margin is 4 percent. There are 6100 shares of stock outstanding, with a price of $1.80 per share. What is the company's price-earnings ratio?
Use the following information to answer this question. Windswept, Inc.2017 Income Statement($ in millions)Net sales$9400 Cost of goods sold 7490 Depreciation 315 Earnings before interest and taxes$1595 Interest paid 91 Taxable income$1504 Taxes 451 Net income$1053 Windswept, Inc.2016 and 2017 Balance Sheets($ in millions) 2016 2017 2016 2017 Cash$260 $275 Accounts payable$1440 $1585 Accounts rec. 1060 960 Long-term debt 1150 1420 Inventory 1660 1660 Common stock 3320 3030 Total$2980 $2895 Retained earnings 480 730 Net fixed assets 3410 3870 Total assets$6390 $6765 Total liab. & equity$6390 $6765What were the total
Use the following information to answer this question. Bayside, Inc.2017 Income Statement($ in thousands)Net sales$5920 Cost of goods sold 4190 Depreciation 320 Earnings before interest and taxes$1410 Interest paid 27 Taxable income$1383 Taxes 484 Net income$899 Bayside, Inc.2016 and 2017 Balance Sheets($ in thousands) 2016 2017 2016 2017 Cash$75 $180 Accounts payable$1420 $1710 Accounts rec. 920 760 Long-term debt 750 540 Inventory 1540 2000 Common stock 3105 3010 Total$2535 $2940 Retained earnings 810 1060 Net fixed assets 3550 3380 Total assets$6085 $6320 Total liab. & equity$6085 $6320What is the equity
Use the following information to answer this question. Windswept, Inc.2017 Income Statement($ in millions)Net sales$8700 Cost of goods sold 7300 Depreciation 345 Earnings before interest and taxes$1055 Interest paid 87 Taxable income$968 Taxes 339 Net income$629 Windswept, Inc.2016 and 2017 Balance Sheets($ in millions) 2016 2017 2016 2017 Cash$140 $170 Accounts payable$1180 $1267 Accounts rec. 920 730 Long-term debt 1020 1253 Inventory 1520 1560 Common stock 3210 2900 Total$2580 $2460 Retained earnings 460 710 Net fixed assets 3290 3670 Total assets$5870 $6130 Total liab. & equity$5870 $6130What is the cash
Forecasting Interest Rates On May 23, 20XX, the existing or current (spot) one-year, two-year, three-year, and four-year zero-coupon Treasury security rates were as follows:1R1 = 5.25%, 1R2 = 5.75%, 1R3 = 6.25%,1R4 = 6.45%Using the unbiased expectations theory, what is the one-year forward rate on zero-coupon Treasury bonds for year four as of May 23, 20XX
At your discount brokerage firm, it costs $10.50 per stock trade. How much money do you need to buy 100 shares of Apple (AAPL), which trades at $202.64?