Question

In: Finance

A firm has a plow back ratio of 40% and the firms growth rate is 10%....

A firm has a plow back ratio of 40% and the firms growth rate is 10%. What is the return on equity?

10%

25%

.4%

OR

.04%

Solutions

Expert Solution


Related Solutions

A company has EBIT=$100 million and tax rate of 21%. The firms plow back ratio is...
A company has EBIT=$100 million and tax rate of 21%. The firms plow back ratio is 30%. The company has 20 million shares. How much would be the firm's dividend per share? A. 2.311 B. 2.765 C. 1.185 D. 3.500
A firm has an ROA of 10%, a dividend payout ratio of 40%, an Equity Multiplier...
A firm has an ROA of 10%, a dividend payout ratio of 40%, an Equity Multiplier of 1.60, what is the Sustainable Growth Rate? 9.04% 6.84% 9.60% 10.62% If full capacity sales levels of existing equipment are $2,000,000 and the firm is currently selling 70% of capacity, what percent can sales grow before new Fixed Assets are required? 42.86% 25.00% 70.00% 30.00% Current Assets = $900; Fixed Assets = $2,500; Accounts Payable = $300; Most recent year Sales of $1,500,...
A stock does not currently pay a dividend because the firm needs to plow back its...
A stock does not currently pay a dividend because the firm needs to plow back its earnings to fuel growth. However, it is expected to pay a dividend of $2.00 five years from today. This dividend is then expected to grow at a rate of 8% for the following 5 years. It will then level off and grow at a rate of 5% indefinitely. For the next 5 years, R = 10%. R = 8% for the following 4 years...
High Growth Period: Growth rate during period = 10% Payout rate during period = 40% Stable...
High Growth Period: Growth rate during period = 10% Payout rate during period = 40% Stable Growth Period: Growth rate during period = -1% Payout rate during period = 80% Please assume all other inputs remain unchanged. Please show your work. There are two stocks. Assume a capitalization rate of 10%. Stock A is expected to pay a dividend of $15 next year. Thereafter, dividend growth is expected to be -2% per annum forever (note that dividends are declining). Stock...
1. Suppose an industry has 4 firms and the firms have 40%, 30%, 20% and 10%...
1. Suppose an industry has 4 firms and the firms have 40%, 30%, 20% and 10% of the market share, what is the HHI index for this industry? 2. If the third and fourth firms in the industry above merge, what is the new HHI index for this industry? 3.What is the largest possible number for HHI index? 4. What is the HHI for the cellular wireless industry?
It is not possible to value a firm that has a supernormal(variable) growth rate for...
It is not possible to value a firm that has a supernormal (variable) growth rate for the first few years of its life. True False
A country has a savings rate of 10%, a population growth rate of 3%, depreciation rate...
A country has a savings rate of 10%, a population growth rate of 3%, depreciation rate of 1% and a technology growth rate of 2%.  What is the long-run growth rate of total income per capita according to the Solow model? Group of answer choices 2% 7% 3% we do not have enough information to calculate the long-rung growth rate
24. The sustainable growth rate of a firm is best described as the minimum growth rate...
24. The sustainable growth rate of a firm is best described as the minimum growth rate achievable, assuming a 100 percent retention ratio. minimum growth rate achievable if the firm maintains a constant equity multiplier. maximum growth rate achievable, excluding external financing of any kind. maximum growth rate achievable, excluding any external equity financing while maintaining a constant debt-equity ratio. maximum growth rate achievable with unlimited debt financing. None of the options are correct. 25. Which of the following statements...
A firm has $40 million in sales last year. Its asset to sales ratio is .4...
A firm has $40 million in sales last year. Its asset to sales ratio is .4 and its net profit margin of .07. The firm plans to maintain its current retention ratio is .6; its payables amount to $400,000 million, and it does not have any bank loans as notes payable. If 20% increase in sales is anticipated, how much additional financing is required?        
Two firms in the same industry sell their product at $10. The first firm has a...
Two firms in the same industry sell their product at $10. The first firm has a total fixed cost of $100 and an average variable cost of $6; whereas the corresponding values for the second firm are $300 and $3.33 respectively. (a) Compute the sales elasticity of profit (ie. the percent change in total profit when sales increase by 1%) for the two firms at the point where each sells 60 units and also at the point where each sells...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT