At year-end 2525 the company has Total assets of $6,900 financed by Debt of $3,200 and Stockholders’ equity of $3,700 . For 180 common shares outstanding, the equity price-to-book ratio at year-end 2525 is 1.28. During 2526, the company expects an asset turnover ratio (= Salest÷ Total assetst-1 ) of 4.4 and an operating margin (= (Sales – operating expenses) ÷ Sales ) of 9.7%. Interest charges will equal 6% of Debt. Corporate taxes equal 34% of taxable income and the payout ratio always is 45%. Your analyst tells you that at year-end 2526 the company price-to-earnings ratio will equal 4.4. What is the shareholders’ rate of return for year 2526? 

Answer rating: 100% (QA)

Year 2525 stoch holers equity of3700 equity pricetoboock ratio at yearen... View the full answer