You are convinced that capacity utilization next year will decline from 82 percent to about 79 percent. Explain what effect that only this change will have on the operating profit margin.
Answer to relevant QuestionsYou see an estimate that hourly wage rates will increase by 6 percent next year. What other information do you need to determine the effect of this wage rate increase on the operating profit margin, and why do you need it?Currently, the dividend-payout ratio (D/E) for the aggregate market is 60 percent, the required return (k) is 11 percent, and the expected growth rate for dividends (g) is 5 percent.a. Compute the current earnings ...Assume all the firms in a particular industry have consistently experienced similar rates of return. Discuss what this implies regarding the importance of industry and company analysis for this industry.Discuss when you would use the two-stage growth FCFE model rather than the constant growth model.Assume that you uncover two stocks with substantially different price/sales ratios (e.g., 0.5 versus 2.5). Discuss the factors that might explain the difference.
Post your question