Bulla Recording, Inc., wishes to maintain a growth rate of 12 percent per year and a debt–equity ratio of .40. Profit margin is 5.3 percent, and the ratio of total assets to sales is constant at .75. Is this growth rate possible? To answer, determine what the dividend payout ratio must be. How do you interpret the result?
Answer to relevant QuestionsUse the sustainable growth rate equations from the previous problem to answer the following questions. No Return, Inc., had total assets of $ 285,000 and equity of $ 176,000 at the beginning of the year. At the end of the ...Solve for the unknown interest rate in each of thefollowing:Investment X offers to pay you $ 4,500 per year for nine years, whereas Investment Y offers to pay you $ 7,000 per year for five years. Which of these cash flow streams has the higher present value if the discount rate is 5 ...What is the present value of an annuity of $ 6,500 per year, with the first cash flow received three years from today and the last one received 25 years from today? Use a discount rate of 7 percent. Suppose you are going to receive $ 20,000 per year for five years. The appropriate interest rate is 7 percent. a. What is the present value of the payments if they are in the form of an ordinary annuity? What is the present ...
Post your question