a. $41.58b. $42.64c. $43.71d. $44.80e. $45.92
a. $24,057b. $26,730c. $29,700d. $33,000e. $36,300
1. (TCO H) Your consulting firm was recently hired to improve the performance of Shin-Soenen Inc, which is highly profitable but has been experiencing cash shortages due to its high growth rate. As one part of your analysis, you want to determine the firm's cash conversion cycle. Using the following information and a 365-day year, what is the firm's present cash conversion cycle?
Average inventory = Annual sales = Annual cost of goods sold = Average accounts receivable = Average accounts payable =
$75,000 $600,000 $360,000 $160,000 $25,000
a. 120.6 days b. 126.9 days c. 133.6 days d. 140.6 days e. 148.0 days (Points : 30)
2. (TCO C) Your company has been offered credit terms of 4/30, net 90 days. What will be the nominal annual percentage cost of its nonfree trade credit if it pays 120 days after the purchase? (Assume a 365-day year.)
a. 16.05% b. 16.90% c. 17.74% d. 18.63% e. 19.56%
(Points : 30)
3. (TCO E) Sapp Trucking's balance sheet shows a total of noncallable $45 million long-term debt with a coupon rate of 7.00% and a yield to maturity of 6.00%. This debt currently has a market value of $50 million. The balance sheet also shows that the company has 10 million shares of common stock, and the book value of the common equity (common stock plus retained earnings) is $65 million. The current stock price is $22.50 per share; stockholders' required return, rs, is 14.00%; and the firm's tax rate is 40%. The CFO thinks the WACC should be based on market value weights, but the president thinks book weights are more appropriate. What is the difference between these two WACCs?
a. 1.55% b. 1.72% c. 1.91% d. 2.13% e. 2.36%
4. (TCO B) A company forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 13%, and the FCFs are expected to continue growing at a 5% rate after Year 3. Assuming that the ROIC is expected to remain constant in Year 3 and beyond, what is the Year 0 value of operations, in millions? Year: 1 2 3 Free cash flow: -$15 $10 $40
a. $315 b. $331 c. $348 d. $367 e. $386
(Points : 35)
5. (TCO G) Based on the corporate valuation model, the value of a company's operations is $1,200 million. The company's balance sheet shows $80 million in accounts receivable, $60 million in inventory, and $100 million in short-term investments that are unrelated to operations. The balance sheet also shows $90 million in accounts payable, $120 million in notes payable, $300 million in long-term debt, $50 million in preferred stock, $180 million in retained earnings, and $800 million in total common equity. If the company has 30 million shares of stock outstanding, what is the best estimate of the stock's price per share?
a. $24.90 b. $27.67 c. $30.43 d. $33.48 e. $36.82
Can you please show the work too. Because all question required to show the work?
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I would be offline soon. Let me know if everything looks great.
Thanks for finishing it up so quickly. You been very good help and being professional. I will leave the feedback in few days.
I hope your son is doing okay now.
You have a nice weekend. I may need your help again.
It did help. Thanks for following up. I just got back from small office trip so I did not get a chance to leave you a feedback. Sorry for the little delay. You are awsome