(Solution) 11. If The Nominal Interest Rate Is 9% And The Inflation Rate Is 6%, Then What Is The Real Interest Rate? | Snapessays.com


(Solution) 11. If the nominal interest rate is 9% and the inflation rate is 6%, then what is the real interest rate?


11. If the nominal interest rate is 9% and the inflation rate is 6%, then what is the real interest rate?

 

 

12. FinanceCorp has fixed costs of $15 million and profits of $10 million. What is its degree of operating leverage (DOL)?

 

 

4. Deployment Specialist pays a current (annual) dividend of $1 and is expected to grow at 18% for two years and then at 5% thereafter. If the required return for the Deployment Specialist is 8%, what is the intrinsic value of Deployment Specialist stock?

 

 

5. Jand, Inc., currently pays a dividend of $1.42, which is expected to grow at a 5%. If the current value of Jand’s shares based on the constant-growth dividend discount model is $36.91, what is the required rate of return?

 

 

12. Use the DuPont system and the following data to find return on equity.

 

•Leverage ratio 3.1

 

•Total asset turnover 2.8

 

•Net profit margin 5.6%

 

•Dividend payout ratio 35.8%

 

 

13. A firm has ROE of 2%, a debt/equity ratio of 0.4, a tax rate of 40%, and pays an interest rate of 7% on its debt. What is its operating ROA?

 

 

14. A firm has a tax burden ratio of .7, a leverage ratio of 1.75, an interest burden of .9, and a return on sales of 8%. The firm generates $2.00 in sales per dollar of assets. What is the firms ROE?

 


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This question was answered on: May 23, 2022

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