Reference no: EM132480887

Question 1: Billingsworth & Company had earnings per share of $4 last year, and it paid a $2 dividend. Total retained earnings increased by $12 million during the year, and book value per share at year-end was $40. Billingsworth has no preferred stock, and no new common stock was issued during the year. If the company's year-end debt (which equals its total liabilities) was $120 million. what was its year-end debt/assets ratio?

Question 2: Refreshing Pool Corporation reported net operating income equal to $120,000 this year. Examination of the company's balance sheet and income statement shows that the tax rate was 40 percent, the depreciation expense was $25,000, $150,000 was invested in assets during the year, and invested capital equals $500,000. The firm's if average after-tax cost of funds is 12 percent What was the firm's (1) operating cash flow, (2) free cash flow, and (3) economic value added (EVA)?