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18. A firm has total debt of $1,480 and a debt-equity ratio of .29. What is the value
of the total assets?
19. The sustainable growth rate:
20. If a firm bases its growth projection on the rate of sustainable growth, shows
positive net income, and has a dividend payout ratio of 30 percent, then the:
21. Which account is least apt to vary directly with sales?
22. If the Hunter Corp. has an ROE of 14 and a payout ratio of 17 percent, what is
its sustainable growth rate?
23. The Wintergrass Company has an ROE of 13.2 percent and a payout ratio of 30
percent.
What is the company’s sustainable growth rate?
2 4. The most common means of financing a temporary cash deficit is a:
25. The length of time between the acquisition of inventory and its sale is called
the:
26. Here are the most recent balance sheets for Country Kettles, Inc. Excluding
accumulated depreciation, determine whether each item is a source or a use of
cash, and the amount.
27. Consider the following financial statement information for the Rivers
Corporation:
Calculate the operating and cash cycles.
28. The nominal rate of return on a bond is 7.28 percent while the real rate is 3.09
percent. What is the rate of inflation?
29. Unique Stores common stock pays a constant annual dividend of $1.75 a share.
What is the value of this stock at a discount rate of 13.25 percent?
30. How much are you willing to pay for one share of stock if the company just
paid an annual dividend of $1.03, the dividends increase by 3 percent annually, and
you require a rate of return of 15 percent?
31. The relationship between nominal rates, real rates, and inflation is known as
the:
32. Titan Mining Corporation has 9.5 million shares of common stock outstanding
and 390,000 5 percentsemiannual bonds outstanding, par value $1,000 each. The
common stock currently sells for $43 per share and has a beta of 1.25, and the
bonds have 15 years to maturity and sell for 114 percent of par. The market risk
premium is 8.3 percent, T-bills are yielding 4 percent, and the company’s tax rate
is 36 percent.
a.
What is the firm's market value capital structure?
b.
If the company is evaluating a new investment project that has the same
risk as the firm's typical project, what rate should the firm use to discount the
project's cash flows?