The sustainable growth rate is%. (Round to three decimal place.) The ending total assets at the sustainable growth rate will be $ (Round to the nearest dollar.) Because the firm grew at its sustainable growth rate, its debt/equity ratio remains constant at 0.717826 and the debt-to-assets ratio will be 0.417869. Thus, the new debt in the capital structure will be 0.417869x$1,084,312=$453,100. Since the firm started at $420,000, it will issue about $33,100 in additional debt. Is the above statement true or false? (Select from the drop-down menu.)
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- Forecast KMS's free cash flow, assuming KMS's market share will increase by 0.23% per year; investment, financing, and depreciation will be adjusted accordingly; and working capital will be as given in the table The Tax Cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career. The free cash flow in 2019 will be $ The free cash flow in 2020 will be $ The free cash flow in 2021 will be $ The free cash flow in 2022 will be $ The free cash flow in 2023 will be $ The free cash flow in 2024 will be $ thousand. (Round to the nearest integer.) thousand. (Round to the nearest integer.) thousand. (Round to the nearest integer.) thousand. (Round to the nearest integer.) thousand. (Round to the nearest integer.) thousand. (Round to the nearest integer.) Data table…For the next fiscal year, you forecast net income of $48,700 and ending assets of $506,100. Your firm's payout ratio is 10.1%. Your beginning stockholders' equity is $295,600 and your beginning total liabilities are $119,300. Your non-debt liabilities such as accounts payable are forecasted to increase by $10,500. What is your net new financing needed for next year? The Tax Cuts and Jobs Act of 2017 temporarily allowed 100% bonus depreciation (effectively expensing capital expenditures). However, we will still include depreciation forecasting in this chapter and in these problems. The net financing required will be $ (Round to the nearest dollar.)Your company has sales of $106,400 this year and cost of goods sold of $62.900. You forecast sales to increase to $114,600 next year. Using the percent of sales method, forecast next year's cost of goods sold The Tax Outs and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures) However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career The forecasted cost of goods sold (COGS) is (Round to the nearest dollar)
- A firm will earn a taxable net return of $500 million next year. If it took on debt today, it would have to pay creditors\varepsilon(rDebt) = 5% + 10% x wDebt2. Thus, if the firm has 100% debt, the financial markets would demand 15% expected rate of return. Further, assume that the financial markets will lend the firm capital at this overall net cost of 15%, regardless of how the firm is financed. The firm is in the 25% marginal tax bracket. 1. If the firmis fully equity-financed, what is its value? 2. Using APV, if the firm is financed with equal amounts of debt and equity today, what is its value? 3. Using WACC, if the firm is financed with equal amounts of debt and equity today, what is its value? 4. Does this firm have an optimal capital structure? If so, what is its APV and WACC?Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%? What are the projected sales in Years 1 and 2? What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2? What is the projected FCF for Year 2?Given the forecast below, estimate the fair market value per share of Kenmore Air's equity at the end of 2017 if the company has 50 million shares outstanding and the market value of its interest-bearing liabilities on the valuation date equals $300 million. Assume that after 2021, earnings before interest and tax will remain constant at $220 million, depreciation will equal capital expenditures in each year, and working capital will not change. Kenmore Air's weighted- average cost of capital is 11 percent and its tax rate is 40 percent. Forecast for Kenmore Air, Inc. Year 2018 2019 2020 2021 -40 85 97 112 Free cash flow ($ millions)
- The table below shows the forecast cash flow information of Good Time Inc. for the nextyear. The required debt payment in the next year is $88 million, with a current market valueof $60 million. The company pays no tax. If you invest in the corporate debt of Good TimeInc. today, what is your expected return on this investment?For the next fiscal year, you forecast net income of $51,100 and ending assets of $506,900. Your firm's payout ratio is 10.2%. Your beginning stockholders' equity is $298,800, and your beginning total liabilities are $120,700. Your non-debt liabilities, such as accounts payable, are forecasted to increase by $10,000. What will be your net new financing needed for next year? The net financing required will be $. (Round to the nearest dollar.) CThe TTF Corporation is trying to analyze how much financing it will need next year. With the recent economic recovery, more people are starting to purchase their products and thus TTF believes Sales will grow by 25% in 2024. They also believe that all assets and spontaneous liabilities will grow at the same rate as sales. TTF estimates its Net Profit Margin in 2024 will be 6% and it will pay out 40% of Net Income as a dividend. Use the below information to answer the following questions: Item 2023 Accounts Payable 200 Accounts Receivable 500 Accruals 500 Advertising Expense 750 Cash 1,500 Common Stock 1,500 Cost of Goods Sold 3,500 Depreciation Expense 300 Interest Expense 250 Inventory 800 Long Term Debt 1,000 Net Fixed Assets 3,200 Notes Payable 800 Retained Earnings 2,000 Sales 5,000 Taxes 50 The common size entry for Taxes in 2023 is 1 Outside Funds Needed in 2024 is $ 1100 %. (Input number only) (Input number only)
- Net Income for Company A is $200,000 in 2014, $300,000 in 2015, $400,000 in 2016, $500,000 in 2017, and $600,000 in 2018. The expected growth for all years after 2018 is 5%, the 90-Day T-Bill Rate is 20%, and the appropriate percentage above risk-free rate is 12%. Using this information, what is the reasonable value for Company A based on its future income stream for 2014 to 2018? A. 1,394,267.03 B. 4,394,267.03 A or B?The table below shows the forecast cash flow information of Good Time Inc. for the nextyear. The required debt payment in the next year is $88 million, with a current market valueof $60 million. The company pays no tax. If you invest in the corporate debt of Good TimeInc. today, what is your expected return on this investment? hand write pleaseSuppose today is January 1, 2022. You wish to value the shares of Terrapin Industries, a private firm with 100 million outstanding shares, $300M in debt, and $25M in excess cash. The company has a tax rate of 30%. You expect the company’s Sales to equal $300 million in 2022, and to grow at 10% per year through 2025. The company’s EBIT margin (i.e., EBIT as a % of sales) is expected to be 10%, while Net Working Capital is expected to equal 20% of (same year) sales. The balance sheet amount of Net Working Capital at the end of 2021 was $55 million. You expect that the company’s Net PP&E will remain constant from now through 2025 (i.e., capital expenditures will equal depreciation each year). After 2025, free cash flows are projected to grow at a constant 2% rate forever. You expect Terrapin to maintain a 50% D/V ratio in the future. Given this, you have estimated the beta of Terrapin’s equity (Be) at 1.1 and the beta of its debt (Bd) at 0.3. The current long-term risk-free rate is…