Fin 534 Homework Set 5 – Strayer

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FIN 534 Homework Set 5 – Strayer Click On The LinkBelow to Purchase A+ Graded MaterialInstant Download http://www.hwgala.com/FIN-534-Homework-Set-5-Strayer-NEW-FIN534HS5.htm Directions: Answer the following questionson a separate document. Explain how you reached the answer or show your work ifa mathematical calculation is needed, or both. Submit your assignment using theassignment link in the course shell. This homework assignment is worth 100points. Use the following information forQuestions 1 through 3: BoehmCorporation has had stable earnings growth of 8% a year for the past 10 yearsand in 2013 Boehm paid dividends of $2.6 million on net income of $9.8 million.However, in 2014 earnings are expected to jump to $12.6 million, and Boehmplans to invest $7.3 million in a plant expansion. This one-time unusualearnings growth won’t be maintained, though, and after 2014 Boehm will returnto its previous 8% earnings growth rate. Its target debt ratio is 35%. CalculateBoehm’s total dividends for 2014 under each of the following policies:1. Its2014 dividend payment is set to force dividends to grow at the long-run growthrate in earnings. 2. Itcontinues the 2013 dividend payout ratio. 3. Ituses a pure residual policy with all distributions in the form of dividends(35% of the $7.3 million investment is financed with debt). 4. Itemploys a regular-dividend-plus-extras policy, with the regular dividend beingbased on the long-run growth rate and the extra dividend being set according tothe residual policy. Use the following information forQuestions 5 and 6: SchweserSatellites Inc. produces satellite earth stations that sell for $100,000 each.The firm’s fixed costs, F, are $2 million, 50 earth stations are produced andsold each year, profits total $500,000, and the firm’s assets (all equityfinanced) are $5 million. The firm estimates that it can change its productionprocess, adding $4 million to investment and $500,000 to fixed operating costs.This change will (1) reduce variable costs per unit by $10,000 and (2) increaseoutput by 20 units, but (3) the sales price on all units will have to belowered to $95,000 to permit sales of the additional output. The firm has taxloss carry forwards that render its tax rate zero, its cost of equity is 16%,and it uses no debt. 5. Whatis the incremental profit? To get a rough idea of the project’s profitability,what is the project’s expected rate of return for the next year (defined as theincremental profit divided by the investment)? Should the firm make theinvestment? Why or why not? 6. Wouldthe firm’s break-even point increase or decrease if it made the change? ,�2��Sb}

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FIN 534 Homework Set 5 – Strayer Click On The LinkBelow to Purchase A+ Graded MaterialInstant Download http://www.hwgala.com/FIN-534-Homework-Set-5-Strayer-NEW-FIN534HS5.htm Directions: Answer the following questionson a separate document. Explain how you reached the answer or show your work ifa mathematical calculation is needed, or both. Submit your assignment using theassignment link in the course shell. This homework assignment is worth 100points. Use the following information forQuestions 1 through 3: BoehmCorporation has had stable earnings growth of 8% a year for the past 10 yearsand in 2013 Boehm paid dividends of $2.6 million on net income of $9.8 million.However, in 2014 earnings are expected to jump to $12.6 million, and Boehmplans to invest $7.3 million in a plant expansion. This one-time unusualearnings growth won’t be maintained, though, and after 2014 Boehm will returnto its previous 8% earnings growth rate. Its target debt ratio is 35%. CalculateBoehm’s total dividends for 2014 under each of the following policies:1. Its2014 dividend payment is set to force dividends to grow at the long-run growthrate in earnings. 2. Itcontinues the 2013 dividend payout ratio. 3. Ituses a pure residual policy with all distributions in the form of dividends(35% of the $7.3 million investment is financed with debt). 4. Itemploys a regular-dividend-plus-extras policy, with the regular dividend beingbased on the long-run growth rate and the extra dividend being set according tothe residual policy. Use the following information forQuestions 5 and 6: SchweserSatellites Inc. produces satellite earth stations that sell for $100,000 each.The firm’s fixed costs, F, are $2 million, 50 earth stations are produced andsold each year, profits total $500,000, and the firm’s assets (all equityfinanced) are $5 million. The firm estimates that it can change its productionprocess, adding $4 million to investment and $500,000 to fixed operating costs.This change will (1) reduce variable costs per unit by $10,000 and (2) increaseoutput by 20 units, but (3) the sales price on all units will have to belowered to $95,000 to permit sales of the additional output. The firm has taxloss carry forwards that render its tax rate zero, its cost of equity is 16%,and it uses no debt. 5. Whatis the incremental profit? To get a rough idea of the project’s profitability,what is the project’s expected rate of return for the next year (defined as theincremental profit divided by the investment)? Should the firm make theinvestment? Why or why not? 6. Wouldthe firm’s break-even point increase or decrease if it made the change? ,�2��Sb}

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FIN 534 Homework Set 5 – Strayer Click On The LinkBelow to Purchase A+ Graded MaterialInstant Download http://www.hwgala.com/FIN-534-Homework-Set-5-Strayer-NEW-FIN534HS5.htm Directions: Answer the following questionson a separate document. Explain how you reached the answer or show your work ifa mathematical calculation is needed, or both. Submit your assignment using theassignment link in the course shell. This homework assignment is worth 100points. Use the following information forQuestions 1 through 3: BoehmCorporation has had stable earnings growth of 8% a year for the past 10 yearsand in 2013 Boehm paid dividends of $2.6 million on net income of $9.8 million.However, in 2014 earnings are expected to jump to $12.6 million, and Boehmplans to invest $7.3 million in a plant expansion. This one-time unusualearnings growth won’t be maintained, though, and after 2014 Boehm will returnto its previous 8% earnings growth rate. Its target debt ratio is 35%. CalculateBoehm’s total dividends for 2014 under each of the following policies:1. Its2014 dividend payment is set to force dividends to grow at the long-run growthrate in earnings. 2. Itcontinues the 2013 dividend payout ratio. 3. Ituses a pure residual policy with all distributions in the form of dividends(35% of the $7.3 million investment is financed with debt). 4. Itemploys a regular-dividend-plus-extras policy, with the regular dividend beingbased on the long-run growth rate and the extra dividend being set according tothe residual policy. Use the following information forQuestions 5 and 6: SchweserSatellites Inc. produces satellite earth stations that sell for $100,000 each.The firm’s fixed costs, F, are $2 million, 50 earth stations are produced andsold each year, profits total $500,000, and the firm’s assets (all equityfinanced) are $5 million. The firm estimates that it can change its productionprocess, adding $4 million to investment and $500,000 to fixed operating costs.This change will (1) reduce variable costs per unit by $10,000 and (2) increaseoutput by 20 units, but (3) the sales price on all units will have to belowered to $95,000 to permit sales of the additional output. The firm has taxloss carry forwards that render its tax rate zero, its cost of equity is 16%,and it uses no debt. 5. Whatis the incremental profit? To get a rough idea of the project’s profitability,what is the project’s expected rate of return for the next year (defined as theincremental profit divided by the investment)? Should the firm make theinvestment? Why or why not? 6. Wouldthe firm’s break-even point increase or decrease if it made the change?