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FIN 571 Week 5 Individual Study Guide: Text Problem Sets

FIN 571 Week 5 Individual Study Guide: Text Problem Sets

TUTORIAL: THIS TUTORIAL INCLUDES, PROBLEMS, ANSWERS, AND EXPLANATIONS

Chap 17, Prob B1

A. Bixton’s objective is to achieve a credit standing that falls, in the words of the chief financial officer, “comfortably within the ‘A’ range.” What target range would you recommend for each of the three credit measures?

B. Before settling on these target ranges, what other factors should Bixton’s chief financial officer consider?

C. Before deciding whether the target ranges are really appropriate for Bixton in its current financial situation, what key issues specific to Bixton must the chief financial officer resolve?

 

Chap 18, Prob A10

D1 = [ANSWER HIDDEN]

D2 = [ANSWER HIDDEN]

D3 = [ANSWER HIDDEN]

D4 = [ANSWER HIDDEN]

D5 = [ANSWER HIDDEN]

 

Chap 18, Prob B2

a. Over the five-year period, what is the maximum overall payout ratio the firm could achieve without triggering a securities issue?

b. Recommend a reasonable dividend policy for paying out discretionary cash flow in years 1 through 5.

D1 = [ANSWER HIDDEN]

D2 = [ANSWER HIDDEN]

D3 = [ANSWER HIDDEN]

D4 = [ANSWER HIDDEN]

D5 = [ANSWER HIDDEN]

 

Chap 20 problem A1.

1.   Interest Coverage Ratio = [ANSWER HIDDEN]

2.   Tangible Assets / Long-Term Debt = [ANSWER HIDDEN]

3. Cumulative Dividends and Share Repurchases = [ANSWER HIDDEN]

 

Chap 21 Prob. A2.

a. [ANSWER HIDDEN]

b. [ANSWER HIDDEN]