Business, 04.03.2020 00:09 blackkiki5588

Consider Pacific Energy Company and U. S. Bluechips, Inc., both of which reported earnings of $961,000. Without new projects, both firms will continue to generate earnings of $961,000 in perpetuity. Assume that all earnings are paid as dividends and that both firms require a return of 14 percent. (Do not round intermediate calculations and round your answers to 2 decimal places. (e. g., 32.16))

a. What is the current PE ratio for each company?
Price / Earnings times
b. Pacific Energy Company has a new project that will generate additional earnings of $111,000 each year in perpetuity. Calculate the new PE ratio of the company.
Price / Earnings times
c. U. S. Bluechips has a new project that will increase earnings by $211,000 in perpetuity. Calculate the new PE ratio of the firm.
Price / Earnings times

Answers: 3

Show answers

Other questions on the subject: Business

Business, 22.06.2019 08:00, shatj960

Suppose the number of equipment sales and service contracts that a store sold during the last six (6) months for treadmills and exercise bikes was as follows: treadmill exercise bike total sold 185 123 service contracts 67 55 the store can only sell a service contract on a new piece of equipment. of the 185 treadmills sold, 67 included a service contract and 118 did not.

Answers: 1

continue

Business, 22.06.2019 15:30, barstr9146

Brenda wants a new car that will be dependable transportation and look good. she wants to satisfy both functional and psychological needs. true or false

Answers: 1

continue

Business, 22.06.2019 21:00, gd9075

Haley photocopying purchases a paper from an out-of-state vendor. average weekly demand for paper is 150 cartons per week for which haley pays $15 per carton. in bound shipments from the vendor average 1000 cartoons with an average lead time of 3 weeks. haley operates 52 weeks per year; it carries a 4-week supply of inventory as safety stock and no anticipation inventory. the vendor has recently announced that they will be building a faculty near haley photocopying that will reduce lead time to one week. further, they will be able to reduce shipments to 200 cartons. haley believes that they will be able to reduce safety stock to a 1-week supply. what impact will these changes make to haley’s average inventory level and its average aggregated inventory value?

Answers: 1

continue

Business, 22.06.2019 21:40, summerhumphries3

Engberg company installs lawn sod in home yards. the company’s most recent monthly contribution format income statement follows: amount percent of sales sales $ 80,000 100% variable expenses 32,000 40% contribution margin 48,000 60% fixed expenses 38,000 net operating income $ 10,000 required: 1. compute the company’s degree of operating leverage. (round your answer to 1 decimal place.) 2. using the degree of operating leverage, estimate the impact on net operating income of a 5% increase in sales. (do not round intermediate calculations.) 3. construct a new contribution format income statement for the company assuming a 5% increase in sales.

Answers: 3

continue

You know the right answer?

Consider Pacific Energy Company and U. S. Bluechips, Inc., both of which reported earnings of $961,0...