Finance ch. 4 - 40 Year-end stock price $30.60 What is the...

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18. SCENARIO 4-1 The balance sheet and income statement shown below are for Byrd Inc, and the data are to be used for the following questions. Note that the firm has no amortization charges, it does not lease any assets, and none of its debt must be retired during the next 5 years (notes payable will be rolled over). BALANCE SHEET Cash $ 140.0 Accounts payable $ 800.0 Accts. receivable 880.0 Notes payable 600.0 Inventories 1,320.0 Accruals 400.0 Total current assets $2,340.0 Total current liabilities $1,800.0 Long-term bonds 1,000.0 Total debt $2,800.0 Common stock (50,000 shares) 200.0 Retained earnings 1,000.0 Net plant & equip. 1,660.0 Total common equity $1,200.0 Total assets $4,000.0 Total liabilities & equity $4,000.0 INCOME STATEMENT Net sales $6,000.0 Operating costs 5,599.8 Depreciation 100.2 EBIT $ 300.0 Less: Interest 96.0 EBT $ 204.0 Less: Taxes 81.6 Net income $ 122.4 OTHER DATA Shares outstanding (millions) 60.00 Common dividends $42.8 Interest rate on N/P and long-term bonds 6.0% Federal plus state income tax rate
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Unformatted text preview: 40% Year-end stock price $30.60 What is the firm's total assets turnover? A) 1.40 B) 1.20 C) 1.30 D) 1.50 E) 1.10 Points Earned: 5.0/5.0 Correct Answer(s): D 19. Reynolds Corp's total assets at the end of last year were $300,000 and its net income after taxes was $25,000. What was its return on total assets? A) 8.51% B) 8.33% C) 8.87% D) 8.69% E) 8.15% Points Earned: 5.0/5.0 Correct Answer(s): B 20. The Charleston Company is a relatively small, privately owned firm. Last year the company had net income of $15,000 and 10,000 shares were outstanding. The owners were trying to determine the equilibrium market value for the stock prior to taking the company public. A similar firm that is publicly traded had a price/earnings ratio (P/E) of 5.0. Using only the information given, estimate the market value of one share of Charleston's stock. A) $ 1.50 B) $ 2.50 C) $ 5.00 D) $10.00 E) $ 7.50 Points Earned: 5.0/5.0 Correct Answer(s): E...
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