Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

1) Lemond Cyclery custom produces cutting-edge triathlon bikes utilised by world-class athletes for main competitive events like the Ironman in Hawaii. Firm makes each bike by using its proprietary titanium blend, which is ultra flexible, super light, very strong, and very expensive. Its bikes sell for= $35,000 each. In 2014, company has= $4.5 million in revenue, and= $2.4 million in net income. Lemond Cyclery began the year with= $6 million in book equity on January 1. Complete the given, and illustrate all your computaions for each:

a) Estimate firm’s 2019 sales, suppose a 45% sales growth rate per year starting in 2015.

b) Suppose Lemond Cyclery pays out no dividends in 2014, determine the firm’s maximum sustainable growth rate?

c) Compare Lemond Cyclery’s probable sales growth rate and firm’s maximum sustainable growth rate (which you just computed in (b). Will firm be able to support its growth through internally generated funds? If so, describe financial reasons why this is so by using textbook’s concept of maximum sustainable growth rate. If you think firm will not be able to support its growth, use data to describe why, and describe what action management should take.

d) Part 1: If firm pays out= $960,000 in dividends during 2014, determine the firm’s retention rate? Part 2: Suppose the firm pays out= $960,000 in 2014 dividends, determines Lemond Cyclery’s sustainable growth rate?

e) After paying= $960,000 in 2014 dividends on December 31, compute Lemond Cyclery’s new book equity balance.

f) Use your final answer for (e) to reply the given: if Lemond Cyclery’s balance sheet illustrates assets with the book value of $9.6 million, how much debt does firm have?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M915276

Have any Question? 


Related Questions in Basic Finance

A video posted to the wall street journals web site in

A video posted to the Wall Street Journal's Web site in mid-2010 was titled "Equities May Have Rallied Too Much, Buy Puts." a. What are equities? b. What does it mean that "equities may have rallied too much"? c. If equi ...

In the absorption of component a from an air stream into an

In the absorption of component A from an air stream into an aqueous stream, the composition of the two adjacent streams were analyzed to be c A ; L = 4:0 kg mol/m 3  and p A ; G = 1:013 × 10 4  Pa. The Henry's law consta ...

Develop a behavioral or a free-format self-report measure

Develop a behavioral or a free-format self-report measure of the conceptual variable you assessed in problem 1, and collect the relevant data from the same people. Find a partner to help you code the responses, and compu ...

Five years ago northwest water nww issued 50000000 face

Five years ago, NorthWest Water (NWW) issued $50,000,000 face value of 30-year bonds carrying a 14% (annual payment) coupon. NWW is now considering refunding these bonds. It has been amortizing $3 million of flotation co ...

The scores on an aptitude test required for entry into a

The scores on an aptitude test required for entry into a certain job position have a mean at most 500. If a random sample of 36 applicants have a mean of 546 and a standard deviation of 120, is there evidence that their ...

According to an article in the wall street journal during

According to an article in the Wall Street Journal, during the last quarter of 2008, the Walt Disney Company "lost money on a fuel hedge for the company cruise line." Why would Disney want to undertake a fuel hedge? How ...

Apex corporation is considering the purchase of pinnacle

Apex Corporation is considering the purchase of Pinnacle Company in a stock-forstock exchange. Selected data on the two companies are shown in the following table: Apex Pinnacle Sales(millions) $750 $175 Earning after ta ...

Two astronauts with masses m1 and m2 say goodbye and push

Two astronauts with masses m1 and m2 say goodbye and push each other off in the space. The initial velocity of both v0 and after the push off the astronaut with the mass m1 moves with the velocity v1 in the same directio ...

Ac corp currently uses no debt and its beta is 120

ABC Corp. currently uses no debt and its beta is 1.20. Further, ABC's CFO is considering moving to a capital structure with 40% debt. Assume the company's current ROE is 10.0%, its tax rate is 35.0%, the risk free rate a ...

A researcher was interested in the effects of weather on

A researcher was interested in the effects of weather on cognitive performance. He tested participants on either sunny or cloudy days, and obtained the following scores on a 10-item test of cognitive performance. Using t ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro