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At year-end 2010, Bertin Inc.'s total assets were $1.5 million and its accounts payable were $335,000. Sales, which in 2010 were $2.7 million, are expected to increase by 20% in 2011. Total assets and accounts payable are proportional to sales and that relationship will be maintained. Bertin typically uses no current liabilities other than accounts payable. Common stock amounted to $475,000 in 2010, and retained earnings were $330,000. Bertin has arranged to sell $50,000 of new common stock in 2011 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2011. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its profit margin on sales is 4%, and 60% of earnings will be paid out as dividends.
What were Bertin's total long-term debt in 2010? Round your answer to the nearest dollar.
What were Bertin's total liabilities in 2010? Round your answer to the nearest dollar.
How much new long-term debt financing will be needed in 2011? (Hint: AFN - New stock = New long-term debt.) Round your answer to the nearest dollar.
Asset W has an expected return of 13.55 percent and a beta of 1.36. If the risk-free rate is 4.61 percent, complete the following table for portfolios of Asset W and a risk-free asset.
The firm's weighted marginal cost of capital schedule is 12 percent for up to $6 million of investment; 16 percent for between $6 million and $18 million of investment; and above $18 million the weighted cost of capital is 18 percent.
Company is buying new equipment for $120,000. You estimate life of this machine is 6 years and you will depreciate it in a straight line over 5 years to be conservative and suppose no terminal value.
The company uses the CAPM to calculate its cost of equity, and its target capital structure consists of common stock, preferred stock, and debt. Which of the following events would REDUCE its WACC?
Direct materials expense is $3.00 per unit; direct labor is $4.50 per unit. Variable overhead costs is $1.50 per unit; fixed overhead costs is $2.00 per unit. Secretarial salaries are $7.00 per unit and advertising amounts to $4.00 per unit.
Final earnings estimates for Chilean Health Spa & Fitness Center have been prepared for the CFO of the company and are shown in the following table. The firm has 7,500,000 shares of common stock outstanding.
what is the present value of costs of each alternative? Round your answers to the nearest dollar, if necessary. Enter your answers as a whole number. For example, do not enter 1,000,000 as 1 million.
Risk as well as return analysis of a short term investment and Federal and state taxes will be paid on CD but only federal will be paid on Treasury bill
Quest Laboratories last dividend was $1.50. It's current equilibrium stock price is $15.75, and its expected growth rate is a constant 5%. If your required rate of return is 15 percent,
The exercise price on one of ORNE Corporation's call options is $35 and the price of the underlying stock is $34. The option will expire in 55 days. The option is currently selling for $0.25.
Variable cost would be 70% of sales revenue, fixed cost excluding depreciation would be $30,000 per year. The marginal tax rate is 40%. The corporate WACC is 11%.
Alter Bridge Mfg., Inc., is currently operating at only 85 percent of fixed asset capacity. Current sales are $760,000. How fast can sales grow before any new fixed assets are needed?
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