ECON 3050 Answers to Assignment 1
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ECON 3050 Answers to Assignment 1
1 Part 1 Questions based on chapter 2
1. 50 POINTS Assume that Alpha Corporation is listed on the NYSE and has 25 million shares out- standing in 2019 with a price of $94 per share, up from $88 in 2018. The earnings growth is expected to be 15%.
The balance sheet and income statement of Alpha Corporation are given below. (All values are in millions of dollars.) Refer to these financial statements for the following questions.
Balance sheet
Alpha Corporation
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|
2019 |
2018 |
|
2019 |
2018 |
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Assets |
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Liabilities |
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Current assets |
|
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Current liabilities |
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|
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Cash |
195 |
180 |
Accounts payable |
82 |
71 |
|
Accounts receivable |
142 |
127.2 |
Notes payable/short-term debt |
21 |
18 |
|
Inventories |
110 |
90 |
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|
|
|
Total current assets |
447 |
397.2 |
Total current liabilities |
103 |
89 |
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Long-term assets |
|
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Long-term liabilities |
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|
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Net property, plant |
485 |
365 |
Long-term debt |
465 |
361.2 |
|
and equipment |
|
|
Total long-term liabilities |
465 |
361.2 |
|
Total long-term assets |
485 |
365 |
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|
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|
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Total liabilities |
568 |
450.2 |
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Shareholdersíequity |
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Common stock |
324 |
280 |
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Retained earnings |
40 |
32 |
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Total shareholdersíequity |
364 |
312 |
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Total assets |
932 |
762.2 |
Total liabilities and |
932 |
762.2 |
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shareholdersíequity |
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Income Statement
Alpha Corporation