The balance sheet and incorme staterment shown below are for Byrd Inc., and the

Question

The balance sheet and incorme staterment shown below are for Byrd Inc., and the data are to be used for the following questions Note that the firrn has no arnortization charges, it doas nol lease any assels, and none of its debl must be relired during the nexl 5 years (noles payable will be rolled over) BALANCE SHEET $ 800 0 600.0 4000 $1,800.0 10000 $2,800 0 2000 1,000.0 $1,2000 $4 000.0 Cash S 1400 Accounts payable 880.0 Notes payable 1,320.0 Accruals $2,340.0 Total current liabilities Accts. receivable Total curent assets Long-term bonds Total debt Common stock Retained eamings 1,660.0 Total common equity S4,000.0 Total liabilities & equity Net plant & equip Total assets INCOME STATEMENT Net sales Operating costs Depreciation EBIT Loss: Interest EBT Less: Taxes Net income $6,000.0 5,599.8 100.2 S 300.0 96.0 $204.0 816 $ 1224 THER DATA Shares outstading (millions) Common dividends Interest rate on N'P and long-tem bonds Foderal plus state income tax rate Year-end stock price 60.00 $42.8 6.0% 40% $30.60 What is the finm's ROE? What's the firm's debt ratio? What is the firm's EPS? šelect one () a. 9.45% () b. 9.84% ° C. 10 43% O d 963% ? ? 1020% Select one Select onc: a. $2.25 O b. $2.11 O c. $2.39 O d. $2.50 Oe. $2.04 ? a. 70.0% b. 75.0% ? ?. 60090 O d. 80.0% O 650% What's the fim's TIE? What is the firm's P/E ratio? Select one O a. 2.98 O b. 2.82 ? ?. 3.13 O d. 349 Select one O a. 15.0 b. 10.0 O c. 20.0 O d. 12.5 O e. 175

Explanation / Answer

1.
RoE=Net Income/Equity=122.4/1200=10.20%
2.
Debt rsatio=Total Debt/Total Assets=2800/4000=70%
3.
EPS=Net Income/Number of shares=122.4/60=2.04
4.
TIE=EBIT/Interest=300/96=3.13
5.
P/E=Price/EPS=30.6/2.04=15

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