eng111_discussion_week4_questions_and_answers - ENG 111...

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ENG 111 Discussion Week 4 Winter 2009 Q1. Sustainable Growth. If the Layla Corp. has a 19 percent ROE and a 25% payout ratio, what is its sustainable growth rate? ANS: Q2. Calculating EFN. Given the most recent financial statements for Bradley, Inc. Assume assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next year’s sales are projected to be 5,192. (1) Construct its pro forma balance sheet and income statement. (2) What is the external financing needed? ----------- Income Statement: Sales 4,400 Costs 2,685 Net income 1,715 ----------- Balance sheet Assets 13,400 Total Asset 13,400 - Debt 9,100 Equity 4,300 Total Debt and Equity 13,400 ------------ ANS:
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Q3. External Funds Needed. The Optical Scam Company has forecast a 20% sales growth for next year. Its financial statements are given below. ------------- Income Statement Sales 38,000,000 Costs 33,400,000 Taxable income 4,600,000 Taxes 1,610,000 Net Income 2,990,000 Dividends 1,196,000 Additions to retained earnings 1,794,000
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This note was uploaded on 04/05/2010 for the course ENGR 111 taught by Professor King during the Winter '09 term at UCLA.

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eng111_discussion_week4_questions_and_answers - ENG 111...

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