Internal Growth

Go Go Industries is growing at 30 percent per year. It is all-equity financed and has total assets of $1 million. Its return on equity is 25 percent. Its plowback ratio is 40 percent. a. What is the internal growth rate? b. What is the firm's need for external financing this year? c. By how much would the firm increase its internal growth rate if it reduced its payout ratio to zero? d. By how much would such a move reduce the need for external financing? What do you conclude about the relationship between dividend policy and requirements for external financing?

Common types of receivables

What are some common types of receivables other than accounts receivable and notes receivable?

Problems

10. An article recently appeared in the Wall Street Journal indicating that companies are selling their receivables at a record rate. Why are companies selling their receivables? 29. How is a gain or loss on the sale of a plant asset computed? 34. What are natural resources, and what is their distinguishing characteristics? 35. Explain what depletion is and how it is computed. P1-6B On January 1, 2002, Case Western Company had Accounts Receivable of $54,200 and Allowance for Doubtful Accounts of $4,700. Case Western Company prepares financial statements annually. During the year the following selected transactions occurred. Jan. 5 Sold $7,000 of merchandise to Garth Bro... click for more

Required rate of return on stock; parties (principal, agent) to the transaction in the purchase of assets; price of stock

1. A stock that pays a constant dividend of $1.5 forever currently sells for $10.71. What is the required rate of return? A.10% B.12% C.13% D.14% E.15% ------------- 2. X hires Y investment bank to negotiate the purchase of the fiber optic assets of Z. Identify the parties to this transaction: A. Y is the principal and X is the agent B. X is the principal and Y is the agent C. Z is the principal and X is the agent D. Y is the agent while X and Z together are principals E. X is the principal and Z is the agent ------------- 3. What would you pay for a share of X Corp stock today if the next dividend will be $3 per share, your required return on equity investments is 15%, an... click for more

Debt Equity Ratio

If the profit margin is 12 percent, total asset turnover is 1.35 and ROE is 17.20 percent than what is the debt equity ratio?