Question 2a: Discuss the importance of ratio analysis for inter-firm and intra-firm comparisons including circumstances responsible for its limitations .If any Answer: Ratio analysis implies the systematic use of ratios to interpret the financial statements so that the strength and weaknesses of a firm as well as its historical performance and current financial position can be determined. With the help of ratio analysis conclusion can be drawn regarding several aspects such as financial health‚
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Concurrent Auditing Techniques Integrated Test Facility The integrated test facility technique (ITF) involves auditors establishing a mini company or dummy company on the live files processed by an application system. For example‚ in a payroll system‚ auditors might establish a master-file record for a fictitious employee. Auditors then submit test data to the application system as part of the normal transaction data entered into the system. They monitor the effects of their test data on the dummy
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User Brooke B Hewitt Course BA 520: Financial Strat/Tech(68796-W15) Test Part 5 Quiz Started 1/13/15 2:46 PM Submitted 1/14/15 2:48 PM Status Completed Attempt Score 75 out of 75 points Time Elapsed 24 hours‚ 1 minute. Instructions Question 1 3 out of 3 points A rapid build-up of inventories normally requires additional financing‚ unless the increase is matched by an equally large decrease in some other asset. Correct Answer: True Question 2 3 out of 3 points As a firm’s sales grow
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dividend policy 10 2.6 diuviudend as a signal about firm’s performance: 11 Chapter 3 11 Dividend Policy of Confidence Cement Limited 11 3.1 Financial Performance and Dividend Payout 12 3.2 Earnings per share and dividend 12 Fig.1.Comparison between EPS and DPS 13 Fig.2.Comparison between Payout and Growth 14 Fig3: OCF‚ FCF and dividend per share 15 Fig4: Changes in stock price 16 Fig5: Growth and DPS 17 3.3 Implications 17 Fg6:P/E ratio of Confidence Cement Limited 17 Fig7:
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1. If Middlesex increases its cash dividends in 2012 at the same rate of growth as its Net Income rate‚ what will be the total 2012 dividend payout in Dollars? 3‚000‚000 *1.08= 3‚240‚000 2. What is the 2012 dividend payout ratio if the company increases its dividends at 8%? Net income increased by 8 percent would be 15‚000‚000*1.08=16‚200‚000 Payout ratio = 3‚240‚000/16‚200‚000=.2 20% 3. If the company follows a residual dividend policy‚ and maintains its 35% Debt level in its capital
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CHAPTER 10: COST OF CAPITAL HOMEWORK 1. The Dempere Imports Company’s EPS in 2009 was $2.82‚ and in 2004 it was $1.65. The company’s payout ratio is 30%‚ and the stock is currently valued at $41.50. Flotation costs for new equity will be 15%. Net income in 2010 is expected to be $15 million. The market-value weights of the firm’s debt and equity are 40% and 60%‚ respectively. a. Based on the five-year track record‚ what is Dempere’s EPS growth rate? What will the dividend be in 2010?
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takeover. It seemed that boosting EMI’s share price was imperative‚ if Emi wanted to maintain its independence. The Dividend Decision The board already declared an interim dividend of 2p per share in November 2006‚ whether to maintain the past payout level by recommending an additional 6p final EMI dividend be paid. Provided a forecast of the cash flows effects of maintaining the dividend based on market-based forecast of performance. Dividends are payments made by an organization to its shareholders
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introduction to payout policy and Modigliani and Miller’s dividend irrelevance proof. Consideration is given to why profitable technology firms like Cisco Systems‚ Microsoft and Intel used no debt‚ retained large cash balances and preferred to return cash to shareholders in the form of repurchases rather than dividends; how the tax and market environment for dividends has changed over time; and what impact the proposed dividend tax reforms and market environment of 2003 will have on future payout policy.
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PROBLEM SET 5: INTEREST RATES‚ AMORTIZING LOANS‚ BOND VALUATION‚ STOCK VALUATION 1. A typical credit card agreement quotes an interest rate of 18 percent APR. Monthly payments are required. What is the actual interest rate you pay on such a credit card? 2. After carefully going over your budget‚ you have determined you can afford to pay €632 per month toward a new sports car. You call up your local bank and find out that the going rate is 1 percent per month for 48 months. How much you can borrow
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per year for the next five years. Assume that earnings and dividends are expected to grow at 7.5% in perpetuity. What rate of return are investors expecting? b. Assume instead that Minor Motors generates a Return on Equity of 10% and that its payout ratio is 40% what is the current book value of Minor Motors? What is the growth rate? If investor expect the return calculated in part (a) what
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