User Account

All Pages

Total amount of financing used to finance

Assignment Help Finance Basics
Reference no: EM132540540

The last balance sheet of Lotus company is as follows Assets:

Current Assets: 20 000 000

Long-Term Assets: 80 000 000

Total Assets: 100 000 000

Liability and Equity

Account Payables: 4 000 000

Accrued Expenses: 1 000 000

Short-Term Loan: 15 000 000

Long Term Loan: 50 000 000

Equity as Common Stock: 30 000 000

Total Liab. and Equity: 100 000 000

This firm do not have any outstanding preferred stocks.

a) What is the total amount of financing used to finance the assets of this firm?

b) What is the weight of debt and the weight of equity (common stock) in financing the assets of that firm?

c) Assume that this firm has only one short term loan whose annual interest rate is 10% and only one long-term loan whose annual interest rate is 12%. What is the cost of debt for that firm if the corporate tax rate is 20%?

d) This firm uses dividend discount method to find the cost of equity. What is the cost of equity if the expected dividend next year is $3 per share, if the current market value of Lotus shares is $30 per share and if firm expects an annual growth rate of 5% in future dividends?

e) What is the WACC (weighted average cost of capital) fort hat firm?

Note: You may use two or three decimals (e.g. 25.15) in your answers

Reference no: EM132540540

Questions Cloud

Dividend yield and capital gains yield on epsilon shares : Assuming that required return is 13% and the dividend growth will continue at the same rate forever, what is the dividend yield and capital gains
The major components of data warehouse architecture : Explain the major components of a data warehouse architecture, including the various forms of data transformations needed to prepare data for a data warehouse.
What is delta share price in three years time : What is Delta's share price in three years time (after the third year of supernormal growth), assuming a required return of 15%?
What exact amount will gretta need in 13 years : Assume that money can be deposited at 8% per year compounded semiannually. What exact amount will Gretta need in 13 years?
Total amount of financing used to finance : a) What is the total amount of financing used to finance the assets of this firm?
Identify the non-verbal channels : Conveys meaning without relying on language. Not the words, but how we say the words and how we look when we say the words
Paramount importance to the government : Assume you are a fresh graduate from UPSA with Public Finance as one of your specializations.
Accurately reflect the study results and flaws : Explain how you would change the conclusion or results section to more accurately reflect the study results and flaws.
What is the total amount of financing : The last balance sheet of Lotus company is as follows Assets:

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd