Suppose that the market value (in thousands of dollars) of Fincorp?s fixed assets in 2019 is $6,000
Question:
Suppose that the market value (in thousands of dollars) of Fincorp?s fixed assets in 2019 is $6,000 and that the value of its long-term debt is only $2,200. In addition, the consensus among investors is that Fincorp?s past investments in developing the skills of its employees are worth $2,900. This investment, of course, does not show up on the balance sheet. What will be the price per share of Fincorp stock?
2018 2019 $4,000 $4,100 Revenue Cost of goods sold 1,600 1,700 500 Depreclatlon 520 Inventorles 300 350 Administrative expenses 500 550 Interest expense 150 150 Federal and state taxes" 400 420 Accounts payable 300 350 Accounts recelvable 400 450 Net fixed assets Long-term debt 5,000 5,800 2,000 2,400 Notes payable 1,000 600 Dividends pald 410 410 Cash and marketable securitles 800 300
Step by Step Answer:
Market Value Balance Sheet 2019 figures in thousands of dollars Assets Liabilities Shareholders Equi...View the full answer
Fundamentals of Corporate Finance
ISBN: 978-1260566093
10th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
Related Video
Constant Growth Dividend Discount Model – This dividend discount model assumes dividends grow at a fixed percentage. They are not variable and are consistent throughout. Variable Growth Dividend Discount Model or Non-Constant Growth model
Students also viewed these Business questions
-
Suppose the price per share of XYZ stock at the beginning of years 2005, 2006, 2007, 2008 is $100, $120, $90 and $99, respectively. The stock pays a $3 dividend per share each year. Suppose you buy...
-
The following matrix shows the costs in thousands of dollars for assigning Individuals A, B, C, and D to Jobs 1, 2, 3, and 4. Solve the problem showing your final assignments in order to minimize...
-
Suppose that the market for Web search engines can best be characterized as monopolistically competitive. If this is the case, should firms that operate in the market such as Yahoo and Google be...
-
Write balanced equations based on the information given. (a) Solid magnesium + oxygen gas solid magnesium oxide (b) Nitrogen monoxide gas + oxygen gas nitrogen dioxide gas (c) Gaseous ethane(C2H6)...
-
Write an equation of each line. a. the line y = 4.7x translated down 3 units b. the line y = - 2.8x translated right 2 units c. the line y = - x translated up 4 units and left 1.5 units
-
The flow of manufacturing costs through the ledger accounts of ISP, Inc., in the current year is illustrated as follows in summarized form. Instructions. Indicate the following amounts requested....
-
John Alexander is considering putting money into the following investments: a. A $10,000.00, five-year certificate of deposit earning 4.5% interest compounded annually b. A $2,500.00, seven-year...
-
Refer to the data in Exercise 6-31. The president of Tiger Furnishings is confused about the differences in costs that result from using direct labor costs and machine-hours. Required a. Explain why...
-
Excel Activity: Issues in Capital Budgeting units per year. x Download spreadsheet Ch 1 3 P 1 8 Build a Model - 0 6 f 3 ab , xlsx NPV $ IRR % Regular payback period years answers to the nearest...
-
The income statement of Fezzik's Shoe Repair is as follows: On April 1, the Owner's Capital account had a balance of $12,900. During April, Fezzik withdrew $3,000 cash for personal use. Prepare...
-
Examine the values for depreciation in 2019 and net fixed assets in 2018 and 2019. What was Fincorp?s gross investment in plant and equipment during 2019? 2018 2019 $4,000 $4,100 Revenue Cost of...
-
Construct a statement of cash flows for Fincorp for 2019. 2018 2019 $4,000 $4,100 Revenue Cost of goods sold 1,600 1,700 500 Depreclatlon 520 Inventorles 300 350 Administrative expenses 500 550...
-
The number of TV channels that the average U.S. home receives has been soaring in recent years. The function t(x) = 0.16x2 + 0.46x + 21.36 can be used to estimate this number, where x is the number...
-
dx et y = f(x) be the solution to the differential equation What is the approximation for f(0) obtained using Euler's method with 2 steps of equal length, d=3y-x with initial condition f(1) = 3....
-
Consider the vibrations of a vehicle traveling forward at a constant speed on a road. The sprung mass of the vehicle is 750 kg and has a radius of gyration of 69.3 cm. The centre of mass of the...
-
William works as machine hand for ABC Ltd. Study the following information relating to his earning for the week as shown: Basic Working Hours: 8 hours/ day Hourly Wage Rate: $4.50 Overtime: Time...
-
Sound Master manufacture and sells compact discs, price and cost data are as follows: Sales (150,000 units) = Rs. 3,750,000 Variable Cost per unit Manufacturing Cost = Rs. 18.50 Selling Expense = Rs....
-
The income statement for Electronic Wonders reports net sales of $91,618 million and cost of goods sold of $69,138 million. An examination of balance sheet amounts indicates accounts receivable...
-
Describe the major requirements of an effective evacuation protocol.
-
What kind of financial pressures can an LBO cause?
-
You can buy property today for $3 million and sell it in 5 years for $4 million. (You earn no rental income on the property.) a. If the interest rate is 8%, what is the present value of the sales...
-
Compute the present value of a $ 100 cash flow for the following combinations of discount rates and times. a. r = 8%, t = 10 years b. r = 8%, t = 20 years c. r = 4%, t = 10 years d. r = 4%, t = 20...
-
What is the present value of the following cash-flow stream if the interest rate is 6%? Year Cash Flow 1............................$200 2..............................400...
-
Dogs R Us reported a profit margin of 10.40 percent, total asset turnover of 0.74 times, debt-to-equity of 0.70 times, net income of $490,000, and dividends paid to common stockholders of $294,000....
-
5 Choose the correct word or phrase to complete the conversation. de moda recomiendas buena idea apretada opinion creo queda bien me parece que Alma: ;Es recomiendas ir de compras hoy? Migdalia: ; de...
-
The common stock of Devina Company is currently selling for $ 4 0 per share. It is expected that Devina will pay a dividend equal to $ 3 . 7 5 per share this year, D 1 . In addition, analyses have...
Study smarter with the SolutionInn App