2 pages/≈550 words
Mathematics & Economics
Financial Management (Math Problem Sample)
Problem Set 3 1. You invest $50,000 in George's House Painting, Inc, borrowing $30,000 of the money at 9%. If you expect to earn a 20% return on your investment under this arrangement, what would you expect to earn on a % basis, if you put up the entire $50,000 from your own money? Assume no taxes. 2. The market value of your firm's equity is $500 million, which is also the value of your total debt. Your cost of debt (rd) is 6% and your cost of equity is (re) is 10%. What is your weighted average cost of capital (WACC) if your tax rate is 40%? 3. What is operating leverage? 4. Clayton Industries is planning its operations for next year, and Ronnie Clayton, the CEO, wants you to forecast the firm's additional funds needed (AFN). Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Dollars are in millions. Last year's sales = S0 $350 Last year's accounts payable $40 Sales growth rate = g 30% Last year's notes payable (to bank) $50 Last year's total assets = A0 $500 Last year's accruals $30 Last year's profit margin = M 5% Target payout ratio 60% source..
Not exactly what you need?
Do you need a custom essay? Order right now:
- Finance Paper on Dealer Discount With Bank FinancingDescription: The sales price depends on the money saved compared to the manufacturer's suggested retail price (MSRP) going up to $ 32790 for the Jeep Grand Cherokee...4 pages/≈1100 words | 6 Sources | APA | Mathematics & Economics | Math Problem |
- Financial ManagementDescription: Financial Management Mathematics and Economics Math Problem...2 pages/≈550 words | 1 Source | APA | Mathematics & Economics | Math Problem |
- Module 3 SLP Math 201Description: The population standard deviation is 5.34 being the square root of 28.49 (284.9/10), with the variance the same as the standard deviation squared...6 pages/≈1650 words | 3 Sources | APA | Mathematics & Economics | Math Problem |