ACC351A_midterm_with_solutions_rev

ACC351A_midterm_with_solutions_rev - ACC351A MidTerm...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
ACC351A MidTerm Refer to the Kellogg’s annual report, attached.  Your calculations should be based on the  2006 figures.  You, with your brand new Masters degree were hired by Kellogg to perform interesting  financial analysis.   The CFO asks you to compute the following: 1. 10%  What is the amount of the total outstanding obligations and commitments of  Kellogg in 2006? On balance sheet $8,645  Off balance sheet    575 Total                     $9,220 2. 10%  What is Kellogg’s profit margin (return on sales), return on equity and long  term debt to total asset ratios? Net Earnings/Net Sales = 1,004.1/10,906.7=9.2% ROE = Net Earnings/Average Equity = 1,004.1/(2,069+2,283.7)/2 = 46.1% LTD/Total Assets = 3,053/10,714 = 28.4% 3. 20%  What is Kellogg’s WACC assuming the beta is 1.2? Rf+B(Rm-RF) = Ke 5% + 1.2(11% - 5%) = 12.2% ACC351 Midterm Page 1 of 5 Neyland
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
4. 25%
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern