Milo’s Gyms & Fitness had net income of $432,000 on sales of $5,400,000 and paid dividends of $125,000 this year.  The company has 300,000 shares of stock outstanding with a price per share of $18.45.  What is the dividend yield on Milo’s Gyms & Fitness stock?

Matt Druczc business, MasterDecker, was located in:

One of the advantages of debt is that when a firm’s profits are high, all the after-tax net cash flows less the fixed interest expense, are captured by the shareholders.

The answer to this “question” is $12,501

Which of the following directly affects a company’s Free Cash Flow (FCF)?

If a firm changes its capital structure in such a way that the firm now has relatively more debt and less equity than it did before, but the change is not large enough to affect the required returns on the debt or on the equity, the firm’s weighted average cost of capital should stay the same.

Carlita’s Tasty Tacos is considering opening a new location in the large city that currently has two other locations.  The combined sales at the other two locations are $1,245,000 annually.  The new location is expected to generate sales of $450,000 in the first year with 4% sales growth per year for the next 7 years.  If the operating profit margin is 40% and the tax rate is 10%, what is the net after-tax cash flow for the new unit for the first year of operations?

If the Treasury yield curve is upward sloping then:

If a firm changes its capital structure in such a way that the firm now has relatively more debt and less equity than it did before, but the change is not large enough to affect the required returns on the debt or on the equity, the firm’s weighted average cost of capital should increase.

Recalling the Hill Country Snack Foods case, in order to calculate the Cash Payments to Securityholders, you should add together the Cash Flows from Operating Activities and the Dividend Payments.