This year, FCF, Inc/, has earnings before interest and taxes of $10 million, depreciation expenses of $1 million, capital expenditures of $1/5 million, and has increased its net working capital by $500,000/ If its tax rate is 35%, what is its free cash flow?

10/ You are evaluating the stock price of Kroger, a grocery store chain/ It has forward earnings per share of $3/ You notice that its competitor Safeway has a P/E ratio of 13/ What is a good estimate of Kroger’s stock price?

Chapter 15

1/ You are finalizing a bank loan for $200,000 for your small business and the closing fees payable to the bank are 2% of the loan/ After paying the fees, what will be the net amount of funds from the loan available to your business?

9/ Your firm successfully issued new debt last year, but the debt carries covenants/ Specifically, you can only pay dividends out of earnings made after the debt issue and you must maintain a minimum quick

(acid-test) ratio ( ( current assets ? inventory ) / current liabilities ) ( ( current assets ? inventory ) / current liabilities )

of 1:1/ Your net income this year was $70 million/ Your cash is $10 million, your receivables are $8 million, and your inventory is $5 million/ You have current liabilities of $19 million/ What is the maximum dividend you could pay this year and still comply with your covenants?

13/ You own a bond with a face value of $10,000 and a conversion ratio of 450/ What is the conversion price?Please to the follow questions in the attachment/