relatively high profit margin. ROA & ROE comparisons between StilSim and competitor. “Return on assets (ROA) is a measure of profit per dollar of assets” (book 449) The ROA is calculated by dividing the net income by total assets. “The return on equity (ROE) is a measure of how the stockholders fared during the year” (book 449). The ROE is called by dividing the net income by the total equity. In 2016‚ StilSim’s ROA was 2.1% and ROE was 2.7%. StaffAces ROA was 2.7% and ROE was
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purchases in October 1979. Until December 1978‚ Hampton Tools had maintained a capital structure of zero debt. In Dec. 1978‚ the company obtained a $1 million loan from St. Louis National Bank to use along with $2 million in excess cash for the repurchase of company stock from dissident shareholders. Hampton Tools was established in 1915 and experienced record production and profitability until around the mid-1970s. The decline in sales and profitability was due to massive reduction in demand because
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amuse-bouche opening to an elegant meal. Caviar was also a common food in California during the gold rush days. Recently‚ the United States has made a strong comeback in caviar production. The U.S. Goverment says that the roe of sturgeon may be called simply "Caviar‚" whereas the roe of other fish can be called "Caviar" only if the name of the fish comes first. The following is a descriptive list of caviars made from American fresh water fish: American Sturgeon - Sturgeon resemble a prehistoric creature
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contributed to this situation? A/ Hampton Machine Tool Company was unable to repay its loan on time due to several factors. One of such factors is the fact that the stock repurchase‚ for which the loan was initially requested‚ was a major cash disbursement of $3 million. In the period between November 1978 and August 1979‚ stock repurchase represented 58% of total expenditures for that period‚ while inventory purchases represented 42% of total expenditures. There were some developments that also contributed
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1 EPS= $5.08 No. of shares= 300‚000 r=20% ROE=25% DPS=Total dividend/No. of shares=640000/300000=$2.13 Net income = EPS*No. of shares =5.08*300000 =1524000 g=Retention ratio*ROE =[1-(640000/1524000)*0.25 = (1-0.42)*0.25 =0.58*0.25=0.145=14.5% Po=D1/r-g =Do (1+g)/r-g =2.13(1+0.145)/0.20-0.145 =2.43885/0.055 = $44.34 Ans. 2 Industry growth rate g = Retention ratio*ROE = (1-0.41)*0.13 = 0.59*0
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generating attention from society to the cases it decides on‚ yet it takes time for changes in public opinion and implementing the rulings. Focusing on three significant cases decided by the Court— Brown v. Board of Education (Brown) in 1954‚ Roe v. Wade (Roe) in 1973‚ and Obergefell v. Hodges (Obergefell) in 2015‚ and drawing together and analyzing data and
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relevering Wrigley using adjusted present value analysis. Assess the impact on the weighted-average cost of capital‚ earnings per share‚ the credit rating of the firm‚ and voting control of the Wrigley family. Consider the merits of dividend or share repurchase as a means of returning cash to shareholders. The case’s central teaching objective is to explore the financial effects of the capital structure change. Significant here is the trade-off between the tax benefits of debt and the associated costs
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1.ASSESS THE IMPACT ON THE WEIGHTED AVERAGE OF COST OF CAPITAL (WACC) ‚EPS . Chandler knew that the maximum value of the firm was achieved when the weighted average cost of capital was minimized. Thus she intended to estimate what the cost of equity and the wacc might be if wrigley pursued this capital structure change. The projected cost of debt would depend on her assessement of wrigley’s debt rating after recapitalization and on current capital market rates. WACC before recapitalization
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at current prices & Assumes we can borrow at same terms as Omega (or own Omega debt and can sell at same price). 14-6. Cisoft is a highly profitable technology firm that currently has $5 billion in cash. The firm has decided to use this cash to repurchase shares from investors‚ and it has already announced these plans to investors. Currently‚ Cisoft is an all equity firm with 5 billion shares outstanding. These shares currently trade for $12 per share. Cisoft has issued no other securities except
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or the inventory turnover ratio. b. If two firms have the same ROA‚ the firm with the most debt can be expected to have the lower ROE. c. An increase in the DSO‚ other things held constant‚ could be expected to increase the total assets turnover ratio. d. An increase in the DSO‚ other things held constant‚ could be expected to increase the ROE. e. An increase in a firm’s debt ratio‚ with no changes in its sales or operating costs‚ could be expected to lower the profit margin
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