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Finance (Baumgarten)
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The dividend-discount model is primarily used to value firms based on free cash flow.
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The DAX includes the prices of over 500 stocks.
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Your firm purchases goods from its supplier on terms of 1/10, net 30. The effective annual cost to your firm if it chooses not to take advantage of the trade discount offered is closest to:
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The term 2/10 net 30 means:
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Use the following information to answer the question(s) below.Nielson Motors sold 10 million shares of stock in an SEO. The market price of Nielson's stock at the time was $37.50. Of the 10 million shares sold, 4 million shares were primary shares sold by the company, and the remaining 6 million shares were being sold by the venture capital investors. Assume the underwriter charges 4% of the gross proceeds as an underwriting fee which is shared proportionately between the primary and secondary shares.The amount of money raised by the venture capitalists is closest to:
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Use the information for the question(s) below.Suppose that Texas Trucking (TT) has earnings per share of $3.45 and EBITDA of $45 million. TT also has 5 million shares outstanding and debt of $150 million (net of cash). You believe that Oklahoma Logistics and Transport (OLT) is comparable to TT in terms of its underlying business, but OLT has no debt. OLT has a P/E of 12.5 and an enterprise value to EBITDA multiple of 7.Based upon the enterprise value to EBITDA ratio, the value of a share of Texas Trucking is closest to:
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What type of company trades on an organized stock exchange?
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If you buy shares of Coca-Cola on the primary market:
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Use the table for the question(s) below.Luther Industries had sales of $980 million and a cost of goods sold of $560 million in 2020. A simplified balance sheet for the firm appears below:Luther IndustriesBalance SheetAs of December 31, 2020(millions of dollars)
Luther's accounts receivable days is closest to:
| Assets | | | Liabilities and Equity | |
| Cash | 25 | | Accounts payable | 60 |
| Accounts receivable | 85 | | Notes payable | 425 |
| Inventory | 90 | | Accruals | 45 |
| Total current assets | 200 | | Total current liabilities | 530 |
| Net plant, property, and equipment | 6100 | | Long term debt | 2725 |
| Total assets | 6300 | | Total liabilities | 3255 |
| | | | Common equity | 3045 |
| | | | Total liabilities and equity | 6300 |
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Use the table for the question(s) below.Luther Industries had sales of $980 million and a cost of goods sold of $560 million in 2020. A simplified balance sheet for the firm appears below:Luther IndustriesBalance SheetAs of December 31, 2020(millions of dollars)
Luther's inventory days is closest to:
| Assets | | | Liabilities and Equity | |
| Cash | 25 | | Accounts payable | 60 |
| Accounts receivable | 85 | | Notes payable | 425 |
| Inventory | 90 | | Accruals | 45 |
| Total current assets | 200 | | Total current liabilities | 530 |
| Net plant, property, and equipment | 6100 | | Long term debt | 2725 |
| Total assets | 6300 | | Total liabilities | 3255 |
| | | | Common equity | 3045 |
| | | | Total liabilities and equity | 6300 |
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