Which the firm investment bankers have recommended

Assignment Help Finance Basics
Reference no: EM13287537

Howton & Howton Worldwide (HHW) is planning its operations for the coming year, and the CEO wants you to forecast the firm's additional funds needed (AFN). The firm is operating at full capacity. Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past to 50%, which the firm's investment bankers have recommended. Based on the AFN equation, by how much would the AFN for the coming year change if HHW increased the payout from 10% to the new and higher level? All dollars are in millions.

Last year's sales = S0 $300.0 Last year's accounts payable $50.0

Sales growth rate = g 40% Last year's notes payable $15.0

Last year's total assets = A0* $500.0 Last year's accruals $20.0

Last year's profit margin = PM 20.0% Initial payout ratio 10.0%

a. $31.9
b. $33.6
c. $35.3
d. $37.0
e. $38.9

 

Reference no: EM13287537

Questions Cloud

What is the diameter of the needle : You find an unlabeled box of fine needles, and want to determine how thick they are. A standard ruler won't do the job, What is the diameter of the needle
How large a sales increase can the company achieve : Bannister's profit margin is 5% and its payout ratio is 60%. How large a sales increase can the company achieve without having to raise funds externally?
What is his displacement on the walk home : The school bus picks up Brian in front of his house and takes him on a straight-line 3.6 km bus ride to school in the positive direction. what is his displacement on the walk home
Express the voting logic function in a truth table : A minority voting circuit makes a decision based on the minority of votes. The logic receives THREE inputs x, y, and z.Together, these input variables are the binary representation ofthe number of members who vote "yes" out of 7 total members.
Which the firm investment bankers have recommended : Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past to 50%, which the firm's investment bankers have recommended.
Explain a saturated solution of calcium fluoride : Consider a saturated solution of calcium fluoride in 0.039 M potassium nitrate. Complete the following tasks, and then answer the question.
What is the submarines acceleration : A 1460-kg submarine rises straight up towards the surface. Seawater exerts both an upward buoyant force of 16300 N on the submarine, What is the submarine's acceleration
Explain concentrations of reactants and products are mixed : which of the following reactions proceeds to the left when equal concentrations of reactants and products are mixed
Find the thickness of the a-plate at the wavelength : If the polarization state resulting from (a) is represented bya complex number on the complex plane, show that the locus of these points as ψ variesfrom 0 to π/2 is a branch of hyperbola. Obtain the equation of the hyperbola.

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the present value of your bond

You have just won a $50,000 bond that pays no interest and matures in 20 years. If the discount rate is 10%, what is the present value of your bond?

  What will the year 0 free cash flows for the project be

The firm yhas a taxrate of 35%,an opportunity of cost of capital of 15% and it expects net working capital to increase by $100,000 at the beginning of the project. What will the year 0 free cash flows for the project be?

  Computation of break even points

Computation of break even points - Evaluate the number of copies East must sell in order to earn an (operating) profit of $21,000 on this book.

  What effect would these policies have on the company

while the payables deferral period would remain unchanged at 35 days. What effect would these policies have on the company's cash conversion cycle? Round to the nearest whole day.

  Computation of net operating income and market value

Computation of Net operating Income and Market Value and Stock Price and If the selling price per deck of cards will be the same under each method

  What is the cost of external equity

Messman Manufacturing will issue common stock to the public for $50. The expected dividend and growth in dividends are $2.25 per share and 4%, respectively. If the flotation cost is 13% of the issue's gross proceeds, what is the cost of external e..

  Calculate required rate of return for manning enterprises

Manning has a beta of 2, and its realized rate of return has averaged 13% over the last 5 years. Round your answer to two decimal places.

  What are the expected return and standard deviation

What are the expected return and standard deviation of a portfolio with half of its funds invested in each of these securities?

  How much revenue would have to be realized each year

A machine is purchased for $36,000 and will have a market value (salvage value) of $8,000 at the end of its 8 year useful life. If MARR= 9%, how much revenue would have to be realized each year to recover the cost of capital?

  Break-even point and degree of leverage

Healthy Foods, Coirporation, sells 50 pound bags of grapes to the military for $10 a bag. The fixed expenses of this operation are $80,000, while the variable costs of grapes are $.10 per pound.

  What is the amount of the last dividend this company paid

Lamey Headstones increases its annual dividend by 1.5 percent annually. The stock sells for $28.40 a share at a required return of 14 percent. What is the amount of the last dividend this company paid?

  Computing interest rates by using irp concept

Suppose that Interest Rate Parity holds. The spot rate for Euro is $1.20 and the one year forward rate is $1.23. Find out the annual rate of interest on deposits in United States?

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!

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