Pulse Legumes, Inc. is a distributor of vegetables to regional restaurants and small specialty stores. Its...
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Pulse Legumes, Inc. is a distributor of vegetables to regional restaurants and small specialty stores. Its assets consist mostly of inventory, which can be stored only for short periods. All of its warehouses and vehicles are leased. Pulse Legumes does not have many long-term delivery contracts with its customers; instead it relies on its ability to predict local demand and on its connections with a large number of customers. Its business has been performing well over the past few years. Pulse Legumes has some debt outstanding, rated Baa. Its shares are traded on the Nasdaq stock market, and they are included in the S&P Agricultural Suppliers. Some market data: Average return on 1-month Treasuries ("T-bills"), last 80 years: Average return on 1-year Treasuries ("T-bills"), last 80 years: Average return on 5-year Treasuries ("T-notes"), last 80 years: Average return on 10-year Treasuries ("T-notes"), last 80 years: Average return on 30-year Treasuries ("T-bonds"), last 80 years: Average return on 1-month Baa-rated corporate debt, last 80 years: Average return on 1-year Baa-rated corporate debt, last 80 years: Average return on 5-year Baa-rated corporate debt, last 80 years: Average return on 10-year Baa-rated corporate debt, last 80 years: Average return on 30-year Baa-rated corporate debt, last 80 years: 3.535% 3.735% 5.735% 6.735% 6.935% 5.135% 5.335% 7.135% 8.335% 8.535% Today's return on 1-month T-bills: 2.115% Today's return on 1-year T-bills: 2.215% Today's return on 5-year T-notes: 4.515% Today's return on 10-year T-notes: 5.715% Today's return on 30-year T-bonds: 6.215% Today's return on 1-month Baa-rated corporate debt: 3.185% Today's return on 1-year Baa-rated corporate debt: 3.385% Today's return on 5-year Baa-rated corporate debt: 5.685% Today's return on 10-year Baa-rated corporate debt: 6.885% Today's return on 30-year Baa-rated corporate debt: 7.085% Average return on S&P Agricultural Suppliers Index, last 80 years: 13.985% Average return on S&P500 Stock Market Index, last 80 years: Pulse Legumes, Inc.'s equity beta: 11.985% 1.8330 Question: What is Pulse Legumes's return on equity? Show your work, explain! Pulse Legumes, Inc. is a distributor of vegetables to regional restaurants and small specialty stores. Its assets consist mostly of inventory, which can be stored only for short periods. All of its warehouses and vehicles are leased. Pulse Legumes does not have many long-term delivery contracts with its customers; instead it relies on its ability to predict local demand and on its connections with a large number of customers. Its business has been performing well over the past few years. Pulse Legumes has some debt outstanding, rated Baa. Its shares are traded on the Nasdaq stock market, and they are included in the S&P Agricultural Suppliers. Some market data: Average return on 1-month Treasuries ("T-bills"), last 80 years: Average return on 1-year Treasuries ("T-bills"), last 80 years: Average return on 5-year Treasuries ("T-notes"), last 80 years: Average return on 10-year Treasuries ("T-notes"), last 80 years: Average return on 30-year Treasuries ("T-bonds"), last 80 years: Average return on 1-month Baa-rated corporate debt, last 80 years: Average return on 1-year Baa-rated corporate debt, last 80 years: Average return on 5-year Baa-rated corporate debt, last 80 years: Average return on 10-year Baa-rated corporate debt, last 80 years: Average return on 30-year Baa-rated corporate debt, last 80 years: 3.535% 3.735% 5.735% 6.735% 6.935% 5.135% 5.335% 7.135% 8.335% 8.535% Today's return on 1-month T-bills: 2.115% Today's return on 1-year T-bills: 2.215% Today's return on 5-year T-notes: 4.515% Today's return on 10-year T-notes: 5.715% Today's return on 30-year T-bonds: 6.215% Today's return on 1-month Baa-rated corporate debt: 3.185% Today's return on 1-year Baa-rated corporate debt: 3.385% Today's return on 5-year Baa-rated corporate debt: 5.685% Today's return on 10-year Baa-rated corporate debt: 6.885% Today's return on 30-year Baa-rated corporate debt: 7.085% Average return on S&P Agricultural Suppliers Index, last 80 years: 13.985% Average return on S&P500 Stock Market Index, last 80 years: Pulse Legumes, Inc.'s equity beta: 11.985% 1.8330 Question: What is Pulse Legumes's return on equity? Show your work, explain!
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Related Book For
Introduction to Management Accounting
ISBN: 978-0133058789
16th edition
Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta
Posted Date:
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