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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.
What is the approximate number of bonds this company would be required to issue (after paying floatation cost) for raising $1.5 million? Assume tax rate to be 34%.
What will Ms. Browns cash flow be under the proposed capital structure of the firm? Assume that she keeps all 250 of her shares. (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Suppose you want to compare the earnings from two different legal forms for a company, Corporate and Proprietor. Your pre-tax income is $500,000 in both. However there is a difference in the taxes you pay.
The next dividend payment by Blue Cheese, Inc., will be $1.89 per share. The dividends are anticipated to maintain a growth rate of 5 percent forever. The stock currently sells for $38 per share. 1. What is the dividend yield? 2. what is the expec..
What is the price of the bond if the bond price is calculated using continuous compounding and a 5.5% yield?
Percy's CFO estimates that the company's WACC is 13.40%. What is Percy's cost of common equity? Round your answer to two decimal places.
Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next fifteen years, because the firm needs to plow back its earnings to fuel increase.
Calculate the rate of return on each of the four annuities Joan is considering. Given Joan's stated decision criterion, which annuity would you recommend?
Mustaine, Inc., has a current stock price of $54. For the past year, the company had net income of $7,900,000, total equity of $26,300,000, sales of $50,500,000, and 4.1 million shares of stock outstanding.
what do you think about the dilemma facing mark miller? Does this case present an ethical issue? if so, to which party or parties? if you could act as the ultimate authority in this situation, what would you do?
Find out the present value of given each petuities. Each petuity with $1000 annual payment discounted.
AirJet Best Parts, Inc. would like to issue 20-year bonds to obtain remaining funds for the new Mexico plant. The company currently has 7.5% semiannual coupon bonds in the market that sell for $1,062 and mature in 20 years.
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