Question: Last year K9 WebbWear Inc reported an ROE of 20
Last year, K9 WebbWear, Inc., reported an ROE of 20 percent. The firm’s debt ratio was 55 percent, sales were $20 million, and the capital intensity was 1.25 times. Calculate the net income and profit margin for K9 WebbWear last year. This year, K9 WebbWear plans to increase its debt ratio to 60 percent. The change will not affect sales or total assets however it will reduce the firm’s profit margin to 11 percent. By how much will the change in K9 WebbWear’s debt ratio affect its ROE?
Relevant QuestionsYou are considering investing in Dakota’s Security Services. You have been able to locate the following information on the firm: total assets are $32 million, accounts receivable are $4.4 million, ACP is 25 days, net ...Last year, Lakesha’s Lounge Furniture Corporation had an ROA of 7.5 percent and a dividend payout ratio of 25 percent. What is the internal growth rate?Would you prefer to have an investment earning 5 percent for 40 years or an investment earning 10 percent for 20 years? Explain. What is the future value of $500 deposited for one year earning a 8 percent interest rate annually. Compute the present value of an $850 payment made in 10 years when the discount rate is 12 percent.
Post your question