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andrew11 [14]
3 years ago
10

Edwards Enterprises follows a moderate current asset investment policy, but it is now considering a change, perhaps to a restric

ted or maybe to a relaxed policy. The firm's annual sales are $400,000; its fixed assets are $100,000; its target capital structure calls for 50% debt and 50% equity; its EBIT is $39,000; the interest rate on its debt is 10%; and its tax rate is 40%. With a restricted policy, current assets will be 15% of sales, while under a relaxed policy they will be 25% of sales. What is the difference in the projected ROEs between the restricted and relaxed policies?

Business
1 answer:
VashaNatasha [74]3 years ago
8 0

Answer:

Please see attachment

Explanation:

Please see attachment

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Next year Jenkins Traders will pay a dividend of $3.00. It expects to increase its dividend by $0.25 in each of the following th
allsm [11]

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Present value = $9.7150 rounded off to $9.72

Explanation:

Using the dividend discount model, we calculate the price of the stock today. It values the stock based on the present value of the expected future dividends from the stock. To calculate the present value of the next four dividends, we will use the following formula,

Present value = D1 / (1+r)  +  D2 / (1+r)^2  +  D3 / (1+r)^3  +  D4 / (1+r)^4

Where,

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Present value = 3 / (1+0.14)  +  (3+0.25) / (1+0.14)^2  +  

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dybincka [34]

The parents would deposit $ 3150 on the second birthday.

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The term for which they would be depositing- 18 years (until the baby turns of 18 years means 18 annual instalments)

The amount that parents would deposit on the second birthday-

The amount deposited by parents would be 5% more than the amount deposited by them on the previous birthday

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The amount that would be deposited on 2nd birthday would be 3000+150= $ 3150

3 0
3 years ago
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