1) Taco Time Corporation is evaluating an extra dividend versus a share repurchase

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1) Taco Time Corporation is evaluating an extra dividend versus a share repurchase. In either case, $20,140 would be spent. Current earnings are $3.50 per share, and the stock currently sells for $89 per share. There are 3,800 shares outstanding. Ignore taxes and other imperfections. What will the company's EPS and PE ratio be under the two different scenarios?

Extra Dividend Share Repurchase

EPS

PE Ratio

2). Columbia Industries is planning its operations for next year, and Merle Smith, the CEO, wants you to forecast the firm's additional funds needed (AFN). The firm is operating at full capacity. Data for use in your forecast are show below. Based on the AFN equation, what is the AFN for the coming year? Dollars are in millions.

Last year's sales = S₀   $700   Last year's accounts payable     $80

Sales growth rate = g    30%    Last year's notes payable          $100

Last year's total assets = A₀*    $1000 Last year's accruals      $60

Last year's profit margin = PM  5%       Target payout ratio       60%   

3). Last year Eggs Inc. had $1,700 million of sales, and it had $850 million of fixed assets that were used at only 60% of capacity. What is the maximum sales growth rate the company could achieve before it had to increase its fixed assets?