Three companies have the following results during the recent period. a. Derive for each its return on
Question:
a. Derive for each its return on equity based on the three DuPont components.
b. Given the following earnings and dividends, compute the estimated sustainable growth rate for eachfirm.
Transcribed Image Text:
Earnings/share Dividends/share 2.75 1.25 3.00 1.00 1 4.50 1.00
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 57% (14 reviews)
a ROE Net profit margin x Total asset turnover x Total assetsequity Company K ROE 00...View the full answer
Answered By
Simon kingori
I am a tier-one market researcher and content developer who has been in this field for the last six years. I’ve run the freelancing gamut; from market research, data mining and SEO/SMM to copywriting, Content Development, you name it, I’ve done it. I’m extremely motivated, organized and disciplined – you have to be to work from home. My experience in Freelancing is invaluable- but what makes me a cut above the rest is my passion to deliver quality results to all my clients- it’s important to note, I've never had a dissatisfied client. Backed by a Masters degree in Computer Science from MOI university, I have the required skill set and burning passion and desire to deliver the best results for my clients. This is the reason why I am a cut above the rest. Having taken a Bsc. in computer science and statistics, I deal with all round fields in the IT category. It is a field i enjoy working in as it is dynamic and new things present themselves every day for research and exploration.
5.00+
1+ Reviews
10+ Question Solved
Related Book For
Investment Analysis and Portfolio Management
ISBN: 978-0538482387
10th Edition
Authors: Frank K. Reilly, Keith C. Brown
Question Posted:
Related Video
The Dupont analysis is an expanded return on equity formula, calculated by multiplying the net profit margin by the asset turnover by the equity multiplier. The DuPont analysis is also known as the DuPont identity or DuPont model.This Video will guide on how to calculate return on Equity and estimate profitability of shareholders using DuPont Analysis.
Students also viewed these Accounting questions
-
Three companies have the following financial results: What can you conclude about the financial results and the operating strategy of eachcompany? Company A Company B Profit margin Asset turnover...
-
Two companies have the following balance sheets as of December 31, 20X8: In 20X9, each company had sales of $700,000 and operating expenses of $600,000. Sunriver had not repaid the $125,000 Note...
-
Point Claire Company had the following results during the most recent year: sales $500,000; residual income $5,000; investment turnover 2.5; and a required rate of return of 15%. Instructions (a)...
-
Transfer pricing is a significant area of concern for taxing authorities and multinational entities (MNE). Examine at least two (2) potential transfer pricing issues that create concern for both...
-
Referring to Exercise 8.46. determine the sample size needed in order to be 99 percent confident that , the sample proportion of ColorSmart-5000 television sets that last at least five years without...
-
Updraft Systems, Inc., makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management has...
-
Recall that the randomization test for the data in Example 3.5 fails to find evidence of a significant increase in the amount of wear with material B. Does this mean that material B has equivalent...
-
Brehm Vineyards grows a unique white pinot noir grape that they use to produce a white wine that is in high demand. Brehm uses all the grapes they can grow to produce their own white pinot noir wine....
-
MBI LLC expects an EBIT of $2,300 every year forever. The company currently has no debt and is valued at $12,650. The tax rate is 23 percent. SHOW YOUR WORK 1) What will the value of the firm be if...
-
1. In communicating the changes in philosophy and practice within PepsiCo, should CEO Indra Nooyi and her management team use formal or informal channels of communication? Give examples of each. 2....
-
The Shamrock Vegetable Company has the following results. Net sales ............ $6,000,000 Net total assets ..........4,000,000 Depreciation ........... 160,000 Net income ............ 400,000...
-
Given the following balance sheet, fill in the ratio values for 2013 and discuss how these results compare with both the industry average and prior average performance of Sophie Enterprises. SOPHIE...
-
What are some examples of industries that exploit economies of scale by going abroad? Form groups of three and choose an industry to illustrate this concept (e.g., automobiles, mobile phones and...
-
What is industrial psychology? 2. What is psychology? And how it is related to industrial setting? 3. How the study of industrial psychology contribute in getting the right man for the job?
-
Respond to the following in a minimum of 175 words: Select one of the four broad professional fields: environmental or evolutionary psychology, forensic psychology, health or sports psychology, or...
-
Please answer each of the below questions in detail. 1) Define your networking goals and explain how they support your career goals. Consider these questions in your answer: Why do you want to...
-
A customer at Cavallaro's Fruit Stand picks a sample of 4 oranges at random from a crate containing 45 oranges, of which 6 are rotten. What is the probability that the sample contains 2 or more...
-
Discuss the relationship between psychology and communication.
-
A metal rod is 2 m long and 8 mm in diameter. Compute its resistance if the resistivity of the metal is 1.76 10 8 m.
-
Chao, Louis, and Mari, unrelated individuals, own all of the shares of Cerise Corporation. All three shareholders have been active in the management of Cerise since its inception. In the current...
-
FiscalNote is a startup founded by a Washington, DC entrepreneur and funded by a Singapore sovereign wealth fund, the Winklevoss twins of Facebook fame, and others. It uses machine learning...
-
How are the accounts of investor and investee companies affected when the investor acquires stock from stockholders of the investee (for example, a New York Stock Exchange purchase)? Does this differ...
-
Should goodwill arising from an equity investment of more than 20 percent be recorded separately on the books of the investor? Explain.
-
Should goodwill arising from an equity investment of more than 20 percent be recorded separately on the books of the investor? Explain.
-
You own a Triplex and are renting each unit for $1029/month Expenses will be 45% of gross rent Vacancy rate is 5% You will also have additional income by charging $25/month/unit for each unit's use...
-
Calculate this by using this formula: Break-Even Point = Fixed Costs / (Sale Price per Unit - Variable Costs per Unit): Existing Process Metrics: Workforce: 5 employees Output Rate: 60 fittings per...
-
What is your estimate of the total charge, in dollars, for concrete transportation for this project? Your answer should be rounded to the nearest 1000. Do not enter a $ sign. Hint: There are 1000...
Study smarter with the SolutionInn App