Question: A B C D Assignment Question Q1 N 3 Answers to the questions below will be found by closely examining the case. Detective work is

A B C D Assignment Question Q1 N 3 Answers to the questions below will be found by closely examining the case. Detective work is required. 4 If you uncover ambiguity (more than one possibility), mention both. 5 6 COMPUTE WEIGHTED AVERAGE COST OF CAPITAL 7 Formula Equation 8 COST OF DEBT 9 Coupon Rate 7.25% given 10 Marginal Tax Rate 40.0% given 11 Cost of Debt 4.35% 65*(1-b6) k-d = 1 x (1-t) 12 Weight of debt 18% given d : d+e 13 14 COST OF EQUITY 15 Risk-Free Rate 3.70% given 16 Equity Risk Premium 5.00% given R-m - R-f 17 Beta 1.20 given 18 Cost of Equity 9.72% b11+(b13*612) k-e = R-f + [B x (R-m - R-f)] 19 Weight of equity 82% 1-b8 e : d+e 20 21 Weighted-Average Cost of Capital 8.75% (b8*67)+(615*b14) (k-d x wt-d)+(k-e x wt-e)A B C D E F G H Flash Memory, Inc. Exhibit 4 Selected Financial Information for Flash Memory, Inc., and Selected Competitors, 2007 through 2009 Flash Memory, Inc. Micron Technology 2007 2008 2009 30-Apr-10 (a) 2007 2008 2009 30-Apr-10 (a) Sales ($ millions) 77 81 89 5,688 5,841 4,803 EPS ($) 1.52 0.09 1.68 -0.42 -2.10 -2.29 1.46 10 Dividend per share ($) 11 Closing stock price ($) n/a n/a n/a 7.25 2.64 10.56 9.35 12 Shares outstanding (millions) 1.492 1.492 1.492 769.1 772.5 800.7 847.6 13 Book Value per share ($) 11.43 11.52 13.20 10.08 8.00 5.81 6.61 14 ROE 13.28% 0.78% 12.75% -4.13% -26.21% -39.43% 21.00% 15 Capitalization (book value) 16 Debt 28% 34% 34% 24% 31% 40% 33% 17 Equity 72% 66% 66% 76% 69% 60% 67% 18 Beta coefficient n/a 1.25 19 20 21 SanDisk Corporation STEC, Inc. 22 23 Sales ($ millions) 3,986 3,351 3,567 189 227 354 24 EPS ($) 0.84 -8.82 1.83 3.71 0.20 0.09 1.47 1.29 25 Dividend per share ($) 26 Closing stock price ($) 33.17 9.60 28.99 39.84 8.74 4.26 16.34 13.90 27 Shares outstanding (millions) 227.7 225.3 227.4 229.3 49.8 50.0 49.4 50.3 28 Book Value per share ($) 22.64 15.27 17.18 18.13 3.72 3.63 5.65 5.48 29 ROE 3.70% -57.74% 10.63% 17.87% 5.40% 2.36% 26.06% 18.90% 30 Capitalization (book value) 31 Debt 15% 22% 21% 19% 0% 0% 0% 0% 32 Equity 85% 78% 79% 81% 100% 100% 100% 100% 33 Beta coefficient 1.36 1.00 34 35 (a) Security analyst estimates for year-end EPS $ and Return on Equity; actual data on April 30, 2010, for all other items

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q1b. Find the sources of the numbers entered in B15, B16, and B17 and list them. HINT: Case Exhibit 4 lists, among other information, betas for three peers of Flash Memory. B15 is assumed, but...

Q1b. Find the sources of the numbers entered in B15, B16, and B17 and list them.. A B C D Assignment Question Q1 N 3 Answers to the questions below will be found by closely examining the case....

Q1b. Find the sources of the numbers entered in B15, B16, and B17 and list them. A B C D 1 Assignment Question Q1 2 3 Answers to the questions below will be found by closely examining the case....

A B C D 1 Assignment Question Q1 2 3 Answers to the questions below will be found by closely examining the case. Detective work is required. 4 If you uncover ambiguity (more than one possibility),...

How to make capital budgeting calculations? Differentiating between balance sheet information vs income statement information? Recommendations for accepting or rejecting a project? File is attached....

Study Guide Strategic Business Management By A. J. Cataldo About the Author A. J. Cataldo is currently a professor of accounting at West Chester University, in West Chester, Pennsylvania. He holds a...

Business Research MethodologyQuestion Bank 1 1. When the marketing department of an organization attempts to determine the amount of time the managers in this department spend at their computers in...

Hi Tutor, Please find the attached document. I think you can choose the company for Coca-Cola, because the company information is everywhere. Page 0 of 42 Your Name Here Your Company Name Here Annual...

CS 1102 Unit 5 Programming Assignment In this assignment, you will again modify your Quiz program from the previous assignment. You will create an abstract class called "Question", modify...

What are common size financial statements? Explain why they can be useful in analyzing an entity over and above the actual financial statements of the entity.

Harvest moon company has total assets of $37,000 if $2,000 cash is used to purchase a new computer, the total assets would be?

The business was started when the company received $ 5 0 , 0 0 0 from the issue of common stock.Purchased equipment inventory of $ 1 7 6 , 5 0 0 on account.Sold equipment for $ 2 0 4 , 0 0 0 cash (...

Determine the major differences between U.S. GAAP and IFRS disclosure reporting requirements related to each separately reportable operating segment. Next, give your opinion as to whether either U.S....