The most recent financial statements for Crosby, Incorporated, appear below. Sales for 2022 are projected to...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The most recent financial statements for Crosby, Incorporated, appear below. Sales for 2022 are projected to grow by 30 percent. Interest expense will remain constant; the tax rate and the dividend payout rate also will remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. Sales Costs Other expenses CROSBY, INCORPORATED 2021 Income Statement $ 759,000 615,000 27,000 Earnings before interest and taxes Interest expense Taxable income Taxes (21%) Net income Dividends Addition to retained earnings $ 29,040 53,594 $117,000 12,400 $ 104,600 21,966 $ 82,634 Assets Cash Current assets Accounts receivable Inventory Current liabilities $ 24,840 Accounts payable 34,220 Notes payable 71,060 Total Liabilities and Owners' Equity $ 59,800 16,400 $ 76,200 Total $ 130,120 Long-term debt $ 107,000 Owners' equity Fixed assets Net plant and equipment $ 216,000 Common stock and paid-in surplus Retained earnings $106,000 56,920 Total $ 162,920 Total assets $ 346,120 Total liabilities and owners' equity $ 346,120 What is the EFN if the firm wishes to keep its debt-equity ratio constant? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) EFN If the Premier Corporation has an ROE of 14 percent and a payout ratio of 22 percent, what is its sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Sustainable growth rate % The most recent financial statements for Crosby, Incorporated, appear below. Sales for 2022 are projected to grow by 30 percent. Interest expense will remain constant; the tax rate and the dividend payout rate also will remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. Sales Costs Other expenses CROSBY, INCORPORATED 2021 Income Statement $ 759,000 615,000 27,000 Earnings before interest and taxes Interest expense Taxable income Taxes (21%) Net income Dividends Addition to retained earnings $ 29,040 53,594 $117,000 12,400 $ 104,600 21,966 $ 82,634 Assets Cash Current assets Accounts receivable Inventory Current liabilities $ 24,840 Accounts payable 34,220 Notes payable 71,060 Total Liabilities and Owners' Equity $ 59,800 16,400 $ 76,200 Total $ 130,120 Long-term debt $ 107,000 Owners' equity Fixed assets Net plant and equipment $ 216,000 Common stock and paid-in surplus Retained earnings $106,000 56,920 Total $ 162,920 Total assets $ 346,120 Total liabilities and owners' equity $ 346,120 What is the EFN if the firm wishes to keep its debt-equity ratio constant? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) EFN If the Premier Corporation has an ROE of 14 percent and a payout ratio of 22 percent, what is its sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Sustainable growth rate %
Expert Answer:
Related Book For
Corporate Finance
ISBN: 9781260772388
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
Posted Date:
Students also viewed these finance questions
-
In the Pennsylvania Lottery's Pick 3 game, 3 numbers between 0 and 9 are chosen. One lottery player notices that the number 7 tends to be selected quite often. He takes a random sample of lottery...
-
Calculate the equity value of NooN Co using the dividend growth valuation method! 1.1. Share price you have used for dividend growth model ..... 1.2. Number of ordinary shares ..... 1.3. Value of...
-
Consider a corporate bond with a 10.5% coupon rate, paid semi-annually, $1000 par value and a current market price of $766.70. It matures in exactly 20 years. What is the yield to maturity (YTM) on...
-
Romeo Partners is scaling back operations; the partnership has the following assets on its books that it is considering for sale: a. The partnership has $120,000 in trade accounts receivable that it...
-
Contigs are often made using BAC or cosmid vectors. What are the advantages and disadvantages of these two types of vectors? Which type of contig would you make first, a BAC or cosmid contig? Explain.
-
For the reversible isothermal change of an ideal gas undergoing a process, the change in entropy is given by (a) \((\Delta S)_{T}=R \ln \frac{V_{1}}{V_{2}}\) (b) \((\Delta S)_{T}=R \ln...
-
A portion of the combined statement of income and retained earnings of Seminole Inc. for the current year follows. During the year, Seminole Inc. suffered a major casualty loss of $1,340,000 after...
-
Assume a merchandising company provides the following information from its master budget for the month of May Sales $ 119,000 Cost of goods sold $ 84,000 Selling and administrative expenses $ 18,000...
-
How would each scenario impact his tax situation? Lee was injured in an automobile accident caused by a negligent driver of a commercial vehicle. Lee threatened to file a lawsuit against the company...
-
Standard models of economic theory include classical and neo-classical economics. Are these models adequate given a biblical view of economic activity? What might they miss? What about the...
-
Analyzing Causes In 2013, it was reported that house prices were increasing for the first time in almost 5 years. Identify the factors that explain why house prices began to rise
-
A rural village has one family physician. The nearest hospital, 25 miles away, is a thirty-bed facility owned by the physicians who practice in the rural county. Explain why village residents are...
-
1. What role does Symbolic Interaction Theory and Conflict Theory play in technology? 2. Include the perspective of both theories, whether it's positive or negative.
-
2 Consider the market for X. Suppose it is competitive. Two types of firms produce X. Type 1 has a MC function given by MC = (Q-10) + 100. Type 2 has a MC function given by MC2 = (Q2-8) + 100. Fifty...
-
Write a paper in which you address the following: Choose a developing country Guatemala and research its ranking in the Human Development Index. Think of a business that would address some need in...
-
A new car sold for $31,000. If the vehicle loses 15% of its value each year, how much will it be worth after 10 years?
-
The following data were obtained for a proprietary salad dressing tested at $22^{\circ} \mathrm{C}$ in a cup and bob viscometer (cup diameter $=4.2 \mathrm{~cm}$, bob diameter $=4.01 \mathrm{~cm}$,...
-
An inclined tube manometer with a reservoir is used to measure the pressure gradient in a large pipe carrying oil $(\mathrm{SG}=0.91)$ (see Figure $\mathrm{P} 4.5)$. The pipe is inclined at an angle...
-
A mercury manometer is used to measure the pressure drop across an orifice that is mounted in a vertical pipe. A liquid with a density of $0.87 \mathrm{~g} / \mathrm{cm}^{3}$ is flowing upward...
Study smarter with the SolutionInn App