What is the ROE? Note: Do not round intermediate calculations and enter your answer as a...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
What is the ROE? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. What is the sustainable growth rate? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Income Statement Sales Costs Taxable income Tax (25%) Net Income $ 96,600 68,850 $ 27,750 6,938 $ 20,813 Current assets Fixed assets Total Balance Sheet $36,500 Debt Equity 95,900 $ 132,400 Total $ 47,400 85,000 $ 132,400 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 40 percent dividend payout ratio. No external equity financing is possible. What is the ROE? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. What is the sustainable growth rate? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Income Statement Sales Costs Taxable income Tax (25%) Net Income $ 96,600 68,850 $ 27,750 6,938 $ 20,813 Current assets Fixed assets Total Balance Sheet $36,500 Debt Equity 95,900 $ 132,400 Total $ 47,400 85,000 $ 132,400 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 40 percent dividend payout ratio. No external equity financing is possible.
Expert Answer:
Answer rating: 100% (QA)
To calculate the Return on Equity ROE you can use the formula ROE Net IncomeAverage Shareholders Equ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these finance questions
-
ABC Inc. has fixed assets of $200 on its balance sheet, which have recently been appraised at $280. Besides, the firm's balance sheet also lists current assets at $30, which were appraised at $33....
-
1). There are three securities in the market. The following chart shows their possible payoffs: State - Probability of Outcome -Return on Security 1 - Return on Security 2 - Return on Security 3 1...
-
What specific issues should be included in engagement the team members regarding the risk of material misstatement?
-
93) Clay of the Land is a manufacturer of glazed clay pots. Currently, it produces 300 clay pots per month which it sells through nurseries at a constant price of $5 per pot. Current demand for clay...
-
A 1.60-m-tall person lifts a 1.65-kg book off the ground so it is 2.20 m above the ground. What is the potential energy of the book relative to (a) The ground, (b) The top of the person's head? (c)...
-
(i) Explain how to use the deflation method of Exercise 8.2.52 to find the subdominant eigenvalue of a nonsingular matrix A. (ii) Apply your method to the matrices in Exercise 10.6.1. In Exercise...
-
Which measure expresses Liberty's times-interest-earned ratio? a. 15 times b. 27 times c. 20 times d. \(51.8 \%\)
-
A mixture of 54.5 mol% benzene in chlorobenzene at its bubble point is fed continuously to the bottom plate of a column containing two theoretical plates. The column is equipped with a partial...
-
Working required Unanswered Question 8 Correct Answer 0/200 pts Let f (x) be a function defined for all real numbers, such that f(3x-9) = f(x) for all R. If f(x) 5x2 +7 lim x2 = 20 2-x find (if it...
-
A vertical aerial photograph reveals a tall building. The foot of one corner of the building has (x, y) coordinates (30.5, 62.0) (both measured in mm from the lower left-hand corner of the negative),...
-
Seaview is a small resort community on the Gulf of Mexico. Blessed with nice beaches and a good location, Seaview has grown rapidly over the last decade. The growth has not been explosive, so that...
-
On January 2, 2024, Reliable Delivery Service purchased a truck at a cost of $80,000. Before placing the truck in service, Reliable spent $2,200 painting it, $1,200 replacing tires, and $8,600...
-
Burrell Company purchased a machine for $ 3 5 , 0 0 0 on January 2 , Year 1 . The machine has an estimated service life of 5 years and a zero estimated residual value. The asset earns income before...
-
Q2. Based on market multiple, what should be the price of Ferrari IPO? What are the strengths and weaknesses of using multiples in valuations? (200 words) Calculations are to be done in Exh 6...
-
Simplify: 7812 2 3 3 + 100
-
The company Goggles has developed a platform for offering cloud services. It has made a shortlist of 20 services (S1 up to $20) to offer, as shown in the table below Service $1 S2 S3 $4 S5 S6 S7 S8...
-
Consider the following data set for the lifetime of 15 components drawn from an exponential population with failure rate . 128.4 17.0 74.7 335.5 118.2 55.1 22.5 68.5 158.5 161.6 15.0 306.8 a. If the...
-
Avatar Financials, Inc., located on Madison Avenue, New York City, is a company that provides financial advice to individuals and small- to mid-sized businesses. Its primary operations are in wealth...
-
The following additional information is available for the Dr. Ivan and Irene Incisor family. Ivan and Irene have the following investment income, in addition to that reported in Chapter 1: Dividends...
-
Skyler is covered by his company's health insurance plan. The health insurance costs his company $3,500 a year. During the year, Skyler is diagnosed with a serious illness and the health insurance...
-
Steve Jackson (age 51) is a single taxpayer living at 3215 Pacific Dr., Del Mar, CA 92014. His Social Security number is 465-88-9415. In 2012, Steve's earnings and income tax withholding as the...
-
What two dimensions should you use when evaluating project risks? A. probability and impact B. cost and schedule C. negative and positive D. source and responsibility
-
Find at least two video clips and one article that show some of the risks involved in building and sailing the Titanic. Document your findings in a short paper, video, or presentation.
-
A _______________is a document that contains results of various risk management processes, often displayed in a table or spreadsheet format. A. risk event B. trigger C. risk register D. risk...
Study smarter with the SolutionInn App