Chapter 04 Long-Term Financial Planning and Growth - Quiz 01 - Score Assignment Print View 0\/110 Points 0

Chapter 04 Long-Term Financial Planning and Growth - Quiz...

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6/4/2015 Assignment Print View 1/24 Score: 0/110 Points 0 %
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6/4/2015 Assignment Print View 2/24 1. Award: 0 out of 10.00 points MC Qu. 4-A2 The Cookie Shoppe expects sales of $s ... The Cookie Shoppe expects sales of $3,500 next year. The profit margin is 4 percent and the firm has a 47 percent dividend payout ratio. What is the projected increase in retained earnings? $74.20 $35.00 $140.00 $105.00 $65.80 Change in retained earnings = $3,500 × .04 × (1 – .47) = $74.20 References Multiple Choice Learning Objective: 04-1 MC Qu. 4-A2 The Cookie Shoppe expects sales of $s ... Section: 4.3
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6/4/2015 Assignment Print View 3/24 2. Award: 0 out of 10.00 points MC Qu. 4-A4 Stop and Go has a $pm percent profit margin and a $dpop perce... Stop and Go has a 4 percent profit margin and a 43 percent dividend payout ratio. The total asset turnover is 1.50 and the debt- equity ratio is .57. What is the sustainable rate of growth? 6.25 percent 4.73 percent 5.67 percent 5.10 percent 3.74 percent Return on equity = .04 × 1.50 × (1 + .57) = .0942 Sustainable growth = [.0942 × (1 – .43)]/{1 – [.0942 × (1 – .43)]} = 5.67 percent References Multiple Choice Learning Objective: 04-3 MC Qu. 4-A4 Stop and Go has a $pm percent profit margin and a $dpop perce... Section: 4.4
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6/4/2015 Assignment Print View 4/24 3. Award: 0 out of 10.00 points 4. Award: 0 out of 10.00 points MC Qu. 4-A5 R. N. C., Inc. desires a sustainable growth rate of ... R. N. C., Inc., desires a sustainable growth rate of 3.29 percent while maintaining a 46 percent dividend payout ratio and a profit margin of 7 percent. The company has a capital intensity ratio of 1.5. What equity multiplier is required to achieve the company's desired rate of growth? 1.95 2.03 1.37 1.16 1.26 .0329 = [ROE × (1 – .46)] / {1 – [ROE × (1 – .46)]}; ROE = .0590 .0590 = .07 × (1 / 1.5) × EM; EM = 1.26 References Multiple Choice Learning Objective: 04-3 MC Qu. 4-A5 R. N. C., Inc. desires a sustainable growth rate of ... Section: 4.4
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6/4/2015 Assignment Print View 5/24 MC Qu. 4-A8 Major Manuscripts, Inc. does not want to incur any additional ... Major Manuscripts, Inc. 2012 Income Statement Net sales $ 8,700 Cost of goods sold 7,215 Depreciation 300 Earnings before interest and taxes $ 1,185 Interest paid 70 Taxable Income $ 1,115 Taxes 379 Net income $ 736 Dividends $ 244 Major Manuscripts, Inc. 2012 Balance Sheet 2012 2012 Cash $ 2,250 Accounts payable $ 1,150 Accounts rec. 940 Long-term debt 370 Inventory 3,500 Common stock $ 3,700 Total $ 6,690 Retained earnings 5,200 Net fixed assets 3,730 Total assets $ 10,420 Total liabilities & equity $ 10,420 Major Manuscripts, Inc., does not want to incur any additional external financing. The dividend payout ratio is constant. What is the firm's maximum rate of growth? 4.96 percent 15.19 percent 4.51 percent 5.09 percent 7.51 percent
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