Kendall Corners Inc. recently reported net income of $3.4
million and depreciation of $578,000. What was its net cash flow? Assume it had
no amortization expense.
Corporate bonds issued by Johnson Corporation currently yield
8.5%. Municipal bonds of equal risk currently yield 4%. At what tax rate would
an investor be indifferent between these two bonds? Round your answer to two
The Shrieves Corporation has $10,000 that it plans to invest
in marketable securities. It is choosing among AT&T bonds, which yield 8%,
state of Florida muni bonds, which yield 4% (but are not taxable), and AT&T
preferred stock, with a dividend yield of 6.5%. Shrieves's corporate tax rate
is 40%, and 70% of the dividends received are tax exempt. Find the after-tax
rates of return on all three securities. Round your answers to two decimal
A-T rate of return on AT&T bond
A-T rate of return on Florida
A-T rate of return on AT&T preferred stock
Complete the balance
sheet and sales information in the table that follows for Hoffmeister
Industries using the following financial data:
Debt ratio: 50%
Quick ratio: 1.15
Total assets turnover: 2.5
Days sales outstanding: 33.5 days*
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 27%
Inventory turnover ratio: 5.0
* Calculation is based on a 365-day year.
Round your answers to
the nearest whole dollar.
liabilities and equity
Cost of goods
Little Books Inc. recently reported $2.25 million of net
income. Its EBIT was $6.75 million, and its tax rate was 40%. What was its
interest expense? (Hint:Write
out the headings for an income statement and then fill in the known values.
Then divide $2.25 million net income by(1
- T) = 0.6to
find the pre-tax income. The difference between EBIT and taxable income must be
the interest expense. Use this same procedure to work some of the other
problems.) Round your answer to the nearest whole dollar and enter your answer
as a dollar amount.
A company has an EPS of $2.20, a cash flow per share of
$4.55, and a price/cash flow ratio of 8.0. What is its P/E ratio? Round your
answer to two decimal places.