Finance homework

Finance homework

help the homework and i need every step.

1. Company X has $800 million of common equity on its balance sheet; its stock price is 80$ per

share and its MVA is $200 million. Ho many shares are currently outstanding?

2. If investors have all knowable information about a stock, the stock will sell at what price?

3. Which Financial Statement is a snapshot of a firms financial position?

4.

Bauer Software’s current balance sheet shows total common equity of $5,125,000. The company

has 530,000 shares of stock outstanding, and they sell at a price of $27.50 per share. By how

much do the firm’s market and book values per share differ?

Company X finances only with debt and common equity (i.e., no preferred stock), and it has

accounts payable and accruals. The firm’s assets consist entirely of current assets and net plant

and equipment. Total assets are $4 million and net plant and equipment is $250,000. It has notes

payable of $.5 million, long-term debt of $1 million, and total common equity of $1,750,000.

5. What is company X’s Total Debt?

6. What are total liabilities and owners equity that appears on Company X’s balance sheet?

7.

Prezas Company’s balance sheet showed total current assets of $4,250, all of which were required

in operations. Its current liabilities consisted of $975 of accounts payable, $600 of 6% short-term

notes payable to the bank, and $250 of accrued wages and taxes. What was its net operating

working capital?

8.

Rao Construction recently reported $20.50 million of sales, $12.60 million of operating costs

other than depreciation, and $3.00 million of depreciation. It had $8.50 million of bonds

outstanding that carry a 7.0% interest rate, and its federal-plus-state income tax rate was 40%.

What was Rao’s operating income, or EBIT, in millions?

9.

Vasudevan Inc. recently reported operating income of $2.75 million, depreciation of $1.20

million, and had a tax rate of 40%. The firm’s expenditures on fixed assets and net operating

working capital totaled $0.6 million. How much was its free cash flow, in millions?

10.

Over the years, O’Brien Corporation’s stockholders have provided $20,000,000 of capital, when

they purchased new issues of stock and allowed management to retain some of the firm’s

earnings. The firm now has 1,000,000 shares of common stock outstanding, and it sells at a price

of $38.50 per share. How much value has O’Brien’s management added to stockholder wealth

over the years, i.e., what is O’Brien’s MVA?

Test 1, chapter 1-3 Review

11.

Wu Systems has the following balance sheet. How much net operating working capital does the firm

have?

Cash

$ 100

Accounts payable

$ 200

Accounts receivable

650

Accruals

350

Inventory

550

Notes payable

350

Current assets

$1,300

Current liabilities

$ 900

Net fixed assets

1,000

Long-term debt

600

Common equity

300

_____

Retained earnings

500

Total assets

$2,300

Total liab. & equity

$2,300

12. Emery Mining Inc. recently reported $150,000 of sales, $75,500 of operating costs other than

depreciation, and $10,200 of depreciation. The company had $16,500 of outstanding bonds that

carry a 7.25% interest rate, and its federal-plus-state income tax rate was 35%. How much was

the firm’s net income? The firm uses the same depreciation expense for tax and stockholder

reporting purposes.

13. Hartzell Inc. had the following data for 2013, in millions: Net income = $600; after-tax operating

income [EBIT(1

T)] = $700; and Total assets = $2,000. Information for 2014 is as follows: Net

income = $825; after-tax operating income [EBIT(1

T)] = $925; and Total assets = $2,500.

How much free cash flow did the firm generate during 2014?