Fundamentals of Corporate Finance

Prepare in Microsoft® Excel® or Word.

Ch. 1: Questions 3 & 11 (Concepts Review and Critical Thinking Questions section)

3. Corporations [LO3] What is the primary disadvantage of the corporate form of organization? Name at least two advantages of corporate organization.

11. Goal of the Firm [LO2] Evaluate the following statement: Managers should not focus on the current stock value because doing so will lead to an overemphasis on short-term profits at the expense of long-term profits.

Ch. 2: Questions 4 & 9 (Questions and Problems section): Microsoft® Excel® template provided for Problem 4.

4. Per-Share Earnings and Dividends [LO1] Suppose the firm in Problem 3 had 90,000 shares of common stock outstanding. What is the earnings per share, or EPS, figure? What is the dividends per share figure?

9. Calculating Additions to NWC [LO4] The 2014 balance sheet of Steelo, Inc., showed current assets of $4,630 and current liabilities of $2,190. The 2015 balance sheet showed current assets of $5,180 and current liabilities of $2,830. What was the company?s 2015 change in net working capital, or NWC?

Ch. 3: Questions 4 & 7 (Question and Problems section)

4. Calculating Inventory Turnover [LO2] The Green Corporation has ending inventory of $417,381, and cost of goods sold for the year just ended was $4,682,715. What is the inventory turnover? The days? sales in inventory? How long on average did a unit of inventory sit on the shelf before it was sold?

7. DuPont Identity [LO4] If Roten Rooters, Inc., has an equity multiplier of 1.15, total asset turnover of 2.10, and a profit margin of 6.1 percent, what is its ROE?

Ch. 4: Questions 1 & 6 (Questions and Problems section): Microsoft® Excel® template provided for Problem 6.

1. Pro Forma Statements [LO1] Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes):See attatched word document for the simplified financial statement

The company has predicted a sales increase of 15 percent. It has predicted that every item on the balance sheet will increase by 15 percent as well. Create the pro forma statements and reconcile them. What is the plug variable here?

6. Calculating Internal Growth [LO3] The most recent financial statements for Schenkel Co. are shown here:See attatched word Document for financial statement

Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 30 percent dividend payout ratio. What is the internal growth rate?

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