Rand Corp's stock price at the end of last year was $40.00, and its book value
per share was $24.50.
What was its Market/Book ratio?
Midwest Lumber had a profit margin of 5.1%, a total assets turnover of 1.6, and
an equity multiplier of 1.8.
What was the firm's ROE?
An investor is considering starting a new business. The company would require
$500,000 of assets, and it would be financed entirely with common stock.
investor will go forward only if she thinks the firm can provide a 15.0% return
on the invested capital, which means that the firm must have an ROE of 15.0%.
How much net income must be expected to warrant starting the business?
Rolle Corp has $500,000 of assets, and it uses no debt--it is financed only
with common equity.
The new CFO wants to employ enough debt to bring the Debt/
Assets ratio to 45%, using the proceeds from the borrowing to buy back common
stock at its book value.
How much must the firm borrow to achieve the target
Rull Corp's assets are $500,000, and its total debt outstanding is $200,000.
The new CFO wants to employ a debt ratio of 60%.
How much debt must the
company add or subtract to achieve the target debt ratio?
a. $ 80,000