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##### Dear Tutor, please can you assist with the followi...

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Dear Tutor, please can you assist with the following questions. I would also appreciate it if you can provide the calculations you used. 1. A firm has current assets of $200, net fixed assets of $400, accounts payable of $150, long-term debt of $150, equity of $300, sales of $2,000, costs of $1,500, and a tax rate of 34 percent. Assume costs and assets increase at the same rate as sales. Also assume that 40 percent of net income is retained. The current debt-equity ratio is considered optimal and no new equity sales are possible. What is the maximum rate of growth given this information? a) 17.5 percent b) 19.4 percent c) 21.4 percent d) 25.8 percent 2. A firm has net income of $200, total assets of $1,200, and total liabilities of $400. The total asset turnover ratio is 3. What is the sustainable growth rate assuming dividends paid total $60? a) 13.8 percent b) 11.5 percent c) 16.2 percent d) 21.2 percent 3. A firm has 2,000,000 shares of common stock outstanding with a market price of $2.00 each. It has 2,000 bonds outstanding, each with a market value of $1,200 (120 percent of face). The bonds mature in 15 years, have a coupon rate of 10 percent, and pay coupons annually. The firm's beta is 1.2, the risk free rate is 5 percent, and the market risk premium is 7 percent. The tax rate is 34 percent. Compute the WACC. a) 5.42 percent b) 6.53 percent c) 9.36 percent d) 10.28 percent 4. Hartley Psychiatric, Inc. needs to purchase office equipment for its 2000 drive-in therapy centers nationwide. The total cost of the equipment is $2 million. It is estimated that the after-tax cash inflows from the project will be $210,000 annually forever. Hartley has a debt-to-value ratio of 40 percent based on market values. The firm's cost of equity is 13 percent and its pre-tax cost of debt is 8 percent. The flotation costs of debt and equity are 2 percent and 8 percent, respectively. Assume the firm's tax rate is 35 percent. What is the dollar flotation cost for the proposed financing? a) $112,000 b) $118,644 c) $131,230 d) $152,098 5. The current spot rate between "euroland" and the U.S. is ?.82 per $1.00. Expected inflation in "euroland" is 6 percent per year and expected inflation in the U.S. is 3 percent per year. If relative purchasing power parity holds, what is the expected exchange rate in 4 years? a) ?.870 per $1.00 b) ?.896 per $1.00 c) ?.923 per $1.00 d) ?.951 per $1.00,Dear Tutor, My questions are due in the next three hours. Would greatly appreciate urgent assistance. Tovah,Hi Rachel, Thank you for accepting my assignment and I look forward to your assistance. Kind regards, Tovah

Paper#2465 | Written in 18-Jul-2015

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