Find Trademark Corporation's Cash Flow From Assets (CFFA), also known as Free Cash Flow to the Firm (FCFF), over the year ending 30th June 2013.
| Trademark Corp | ||
| Income Statement for | ||
| year ending 30th June 2013 | ||
| $m | ||
| Sales | 100 | |
| COGS | 25 | |
| Operating expense | 5 | |
| Depreciation | 20 | |
| Interest expense | 20 | |
| Income before tax | 30 | |
| Tax at 30% | 9 | |
| Net income | 21 | |
| Trademark Corp | ||
| Balance Sheet | ||
| as at 30th June | 2013 | 2012 |
| $m | $m | |
| Assets | ||
| Current assets | 120 | 80 |
| PPE | ||
| Cost | 150 | 140 |
| Accumul. depr. | 60 | 40 |
| Carrying amount | 90 | 100 |
| Total assets | 210 | 180 |
| Liabilities | ||
| Current liabilities | 75 | 65 |
| Non-current liabilities | 75 | 55 |
| Owners' equity | ||
| Retained earnings | 10 | 10 |
| Contributed equity | 50 | 50 |
| Total L and OE | 210 | 180 |
Note: all figures are given in millions of dollars ($m).
Question 213 income and capital returns, bond pricing, premium par and discount bonds
The coupon rate of a fixed annual-coupon bond is constant (always the same).
What can you say about the income return (##r_\text{income}##) of a fixed annual coupon bond? Remember that:
###r_\text{total} = r_\text{income} + r_\text{capital}###
###r_\text{total, 0 to 1} = \frac{c_1}{p_0} + \frac{p_1-p_0}{p_0}###
Assume that there is no change in the bond's total annual yield to maturity from when it is issued to when it matures.
Select the most correct statement.
From its date of issue until maturity, the income return of a fixed annual coupon:
Which one of the following will decrease net income (NI) but increase cash flow from assets (CFFA) in this year for a tax-paying firm, all else remaining constant?
Remember:
###NI=(Rev-COGS-FC-Depr-IntExp).(1-t_c )### ###CFFA=NI+Depr-CapEx - ΔNWC+IntExp###Question 529 DDM, real and nominal returns and cash flows, inflation, real estate, no explanation
If housing rents are constrained from growing more than the maximum target inflation rate, and houses can be priced as a perpetuity of growing net rental cash flows, then what is the implication for house prices, all things remaining equal? Select the most correct answer.
Background: Since 1990, many central banks across the world have become 'inflation targeters'. They have adopted a policy of trying to keep inflation in a predictable narrow range, with the hope of encouraging long-term lending to fund more investment and maintain higher GDP growth.
Australia's central bank, the Reserve Bank of Australia (RBA), has specifically stated their inflation target range is between 2 and 3% pa.
Some Australian residential property market commentators suggest that because rental costs comprise a large part of the Australian consumer price index (CPI), rent costs across the nation cannot significantly exceed the maximum inflation target range of 3% pa without the prices of other goods growing by less than the target range for long periods, which is unlikely.
After doing extensive fundamental analysis of a company, you believe that their shares are overpriced and will soon fall significantly. The market believes that there will be no such fall.
Which of the following strategies is NOT a good idea, assuming that your prediction is true?
Mr Blue, Miss Red and Mrs Green are people with different utility functions.
Which of the following statements is NOT correct?
Question 749 Multiples valuation, PE ratio, price to revenue ratio, price to book ratio, NPV
A real estate agent says that the price of a house in Sydney Australia is approximately equal to the gross weekly rent times 1000.
What type of valuation method is the real estate agent using?
Below is the Australian central bank’s cash rate.
From 2011 to 2017 the Australian central bank has implemented: