7-Eleven Malaysia Holding Berhad's annual report for the fiscal year ending 2021 is available at https://www.7eleven.com.my/financial-reports. (At least two years of comparable financial statements are required.) a) Assess 7-Eleven’s financial position for year 2020 and 2021 according to i) liquidity position, and how the liquidity position has changed over time from 2020 to 2021. (6 marks) ii) asset management position, and how its asset management efficiency has changed over time. (6 marks) iii) debt management position, and how its debt management has changed over time. (6 marks) iv) profitability ratios, and how its profitability position has changed over time. (6 marks) v) market value ratios, and how its valuation has changed over time. (6 marks) b) Calculate 7-Eleven’s ROE as well as the industry average ROE, using the DuPont equation. From this analysis, how does 7-Eleven’s financial position. (10 marks) c) Write your opinion on what you think would happen to its ratios if the company initiated cost-cutting measures that allowed it to hold lower levels of inventory and substantially decreased the cost of goods sold. No calculations are necessary. Think about which ratios would be affected by changes in these two accounts. (10 marks)

6. Suppose the S\&P 500 Index portfolio pays a dividend yield of $2 \%$ annually. The index currently is 2,000 . The T-bill rate is $3 \%$, and the S\&P futures price for delivery in one year is $\$ 2,030$. Construct an arbitrage strategy to exploit the mispricing and show that your profits one year hence will equal the mispricing in the futures market.

Evaluate how the use of financial statements and the calculation of key financial ratios can help with the understanding of the business performance of your organisation (McDonald). (20 marks & 700 words)

ZAMBIAN OPEN UNIVERSITY SCHOOL OF BUSINESS STUDIES DEPARTMENT OF BUSINESS ADMINISTRATION 2023-SEMESTER TWO (2) ASSIGNMENTS  BBA 418- PUBLIC FINANCE  LECTURER: DR. M. CHITALA MOBILE NO. 0955455252 / 0976030398 EMAIL: mbitachitala@yahoo.co.uk INSTRUCTIONS: 1. This Assignment should be typed using 12pt Times New Roman with 1.5 line spacing 2. The assignment should be between eight (8) and Ten (10) pages long. 3. The Assignment should be well researched, cited and referenced. 4. Late submission of assignments will not be entertained. _____________________________________________________________________________ ASSIGNMENT TWO DUE DATE: , 2023 Discuss the budget process in Zambia and with the help of examples discuss the challenges, importance and factors that militate against the budget process in Zambia.

Expanding the number of stores in a foreign market, such as the expansion plan launched by Starbucks in China (announced in 2018), is a major capital budgeting project. A project of this scale requires coordinated planning across all functions of a business that you are studying in your Integrated Core classes. Choose and discuss three items on the income statement that you think will be impacted by this new undertaking. Explain why you chose those particular items, and how those items are impacted by the marketing, management, and operations decisions of the company. Choose and calculate three ratios for Starbucks for the last two years. Make sure to select ratios that you think would be impacted by expanding in a new market, and explain your reasoning. Identify a competitor of SBUX and contrast the ratios. Explain why you selected this competitor. Describe how the decisions made by management, marketing, and operations functions of the company can impact, and hopefully improve, these financial ratios. Explain how the financial decisions regarding opening a new store are related to management, marketing or operations decisions that the company must make (or has made)?

To solve the bid price problem presented in the text, we set the project NPV equal to zero and found the required price using the definition of OCF. Thus the bid price represents a financial break-even level for the project. This type of analysis can be extended to many other types of problems. Martin Enterprises needs someone to supply it with 126,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you’ve decided to bid on the contract. It will cost you $915,000 to install the equipment necessary to start production; you’ll depreciate this cost straight-line to zero over the project’s life. You estimate that, in five years, this equipment can be salvaged for $88,000. Your fixed production costs will be $490,000 per year, and your variable production costs should be $17.45 per carton. You also need an initial investment in net working capital of $92,000. Assume your tax rate is 21 percent and you require a return of 10 percent on your investment. a. Assuming that the price per carton is $26.20, what is the NPV of this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Assuming that the price per carton is $26.20, find the quantity of cartons per year you can supply and still break even. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c. Assuming that the price per carton is $26.20, find the highest level of fixed costs you could afford each year and still break even. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Mandevu Enterprises Ltd (MEL) makes and sells furniture. The company has two production departments: Cutting and Assembly, and two support departments: Stores and Machine Maintenance. MEL uses a traditional absorption costing system to allocate production overheads to products. The following budgeted cost information is available for the month: Production departments Service departments Total costs Cutting Assembly Stores Maintenance K K K K K Direct materials 742,960 167,760 403,200 78,000 94,000 Indirect wages 138,000 42,000 30,000 30,000 36,000 Factory Insurance 24,800 Factory security 21,000 Factory rent and rates 72,400 Machine depreciation 13,200 Light and heat 12,480 Canteen expenses 43,800 Supervisors salaries 32,960 Power 56,720 Administrative costs 24,600 MEL prepared the following additional information: Cutting Assembly Stores Maintenance Machine hours 77,200 61,760 15,440 Direct labour hours 48,000 14,400 33,600 Kilowatt hours (% usage) 60 25 5 10 Floor area (square metres) 600 800 400 200 Number of employees 16 36 6 6 Value of stores issues (K) 372,800 279,600 93,200 Value of machinery 480,000 200,000 80,000 40,000 Required: Explain the terms direct costs and indirect costs, giving examples. (4 marks) Prepare a schedule of the total budgeted overheads for each of the four departments, clearly showing the basis of apportionment. (11 marks) Calculate the total budgeted overheads for each of the production departments after the service departments have been re-apportioned. (3 marks) Compute the budgeted overhead absorption rates for each of the production departments. (4 marks) Calculate the selling price for a piece of furniture given the following cost information. Direct materials K30.50 Direct labour hours: Cutting 0.25 hour Assembly 0.75 hour Machine hours: Cutting 0.25 hour Assembly 0.25 hour Profit mark-up is 25% (9 marks) At the end of the period the actual production overhead cost incurred by the Cutting department was K234,480. Actual labour hours worked in that department were 14,100 and actual machine hours recorded were 63,000. Calculate the under or over absorbed production overhead for the Cutting department. (2 marks) Describe the following costing systems: Marginal Absorption costing (4 marks) Explains the effect on profit of using variable (marginal) and absorption costing. (5 marks) Explain TWO advantages and TWO disadvantages of both marginal and absorption costing systems. (8 marks) [Total 50 marks]

Spring Time, a maker of air fresheners, bought advertising space on a billboard near a busy sidewalk. On the first day the ad was up, 9,000 people, some in cars and some on foot, passed the billboard. On average they passed it $\mathbf{2 . 5}$ times. Over the month the billboard will be devoted to Spring Time, it is expected to deliver a total of $\mathbf{3 4 9 , 0 0 0}$ impressions at a cost of $\mathbf{\$ 8 , 7 0 0}$. During the same month, Spring Time is also investing in $\mathbf{3 0}$ daily TV spots on home improvement cable shows at a total cost of $\$ 18,000$ that are expected to deliver $\mathbf{2 0 2 , 0 0 0}$ impressions. What will be the monthly CPM for Spring Time considering both the billboard and TV campaigns?

Below are the financial statements for XYZ Sdn Bhd as at 31 December 2020. The company is applying for a loan from EEE Bank. In order to evaluate the company as a potential debtor, the bank would like to compare the XYZ Sdn Bhd performance with the industry. STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020 Cash 20,000 Account payable 40,000 Marketable securities 55,000 Accrued expenses 20,000 Account receivables 30,000 Tax accrual 40,000 Prepaid expenses 15,000 Long term debt 80,000 Inventory 70,000 Common Stock 20,000 Net land and building 80,000 Retained earnings 70,000 270,000 270,000 INCOME STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 Sales 120,000 Cost of good sold 55,000 Gross Profit 65,000 Selling Expenses 30,000 Earning Before Interest and Tax 35,000 Interest Expense 8,200 Earning Before Tax 26,800 Tax Expenses 25,520 Profit After Tax 1,280 INDUSTRY AVERAGE RATIO Current ratio 1.60 x Average collection period 120 Days Quick ratio 1.00 x Inventory turnover 1.30 x Debt ratio 40% Return on assets 10% Time interest earned 6.3 x Net profit margin 22% Based on the given financial statements: Compute the indicates ratios as listed in industry average ratio for XYZ Sdn Bhd. Analyse the overall performance of the company according to liquidity, activity, profitability and leverage ratios.

Company A: ‘Our company’s objective is to focus on the maximization of global shareholder wealth. We aim at all times to serve our shareholders by paying a high level of dividends and adopting strategies that will increase the company’s share price. Company B: ‘Our company’s primary objectives are to enhance our customers’ satisfaction and to grow our business. We aim to supply our customers with the highest quality products and provide outstanding levels of sales and delivery service, incapable of being matched by our competitors, and thereby increasing our market share.’ Required: (a) Discuss and contrast these objectives. Comment upon any possible ethical implications of the objectives. (15 marks) (b) Provide examples of ethical issues that might affect capital investment decisions, and discuss the importance of such issues in corporate finance

1. _____factors affect channel choice. Multiple Choice a. Market, product, and company b. Geographic, size and type of customers c. Technical, perishability, and unit value d. Financial resources, ability of management, and desire for control e. Intensive, exclusive, and selective distribution        

You have a friend that is considering starting a company. She has asked you for some advice regarding her options and the pros and cons of each option. In your discussion post, provide a detailed explanation of corporate life cycle and describe what option best suits your friend and why use outside resources to provide this information.

What financial arguments could you use to convince the MD that health and safety needs to be improved?

3. Please explain the difference between Capital Gains Tax and Ordinary income Tax. 5.Explain the difference between Amortization and Loan Term.

Asambe (Pty) Ltd is a newly registered company that wants to invest in a new machine. The chief executive officer (CEO) recently heard about the term “weighted average cost of capital” (WACC) and the important role it plays in capital investment decisions. The CEO wants to know more about what the WACC means as well as what Asambe’s WACC is. The following financial information is available to you: 2023 market values Equity - Share capital R100 000 - Preference share capital R50 000 Non-current liabilities - Good Bank loan account R70 000 Additional information: • The shareholders of ordinary shares expect a return of 12%. • The shareholders of preference shares expect a return of 15%. • Similar loans have a yield to maturity of 13.5% per annum. • Income tax rate is 30%. Required: Note: Round off all answers to the nearest two decimals. 1.1. 1.2. Explain to the CEO what the WACC of a company means. Calculate Asambe’s WACC using the above information.  

Keira Mfg. is considering a rights offer. The company has determined that the ex-rights price would be $\$ 58$. The current price is $\$ 60.80$ per share and there are 5 million shares outstanding. The rights offer would raise a total of $\$ 44,000,000$. How many rights are required to get a new share? Round your answer to the nearest integer. Enter your answer below. 5 Correct response: 5 Given that 5 rights are needed to get a new share, what is the subscription price (the price for a new share)? Round your answer to 2 decimal places. Enter your answer below. Number

You are working for Amandla (Pty) Ltd. Amandla rents out office space to different small businesses at a monthly rate in an office building that it owns. Amandla’s directors are considering investing in a solar system to address the electricity supply problems that its tenants currently have to deal with. The purchase of the solar system will result in an increase in the monthly rent of all the occupants of the building. The directors asked you to assist them to decide whether they should purchase the solar system. You have the following information at your disposal: • The cost price for the solar system is R380 000. • The total monthly rental invoices will increase to R8 000 per month for the first year and thereafter the rent will be increased by 10% per year. • The company’s weighted average cost of capital is 14%. • The directors will consider reinvestment after 5 years. Required: Note: Round off all calculations to the nearest rand. Calculate the net present value of the solar system and advise the directors whether they should invest in this system or not.

Jordan, Corp., has debt outstanding with a market value of $\$ 3$ million. The value of the firm would be $\$ X$ million if it were entirely financed by equity. The company also has 360,000 shares of stock outstanding that sell at $\$ 50$ per share. The corporate tax rate is 30 percent. The expected bankruptcy cost is 0.9 million. If there is no other market friction like agency cost/benefit, what is $X$ ? $\$ 23$ million $\$ 24$ million $\$ 25$ million $\$ 21$ million

As an Analyst, you were tasked to compute the Weighted Average Cost of Capital of various companies given the following information. Income tax rate is $25 \%$. \begin{tabular}{|l|c|c|c|c|} \hline & W Corp. & A Corp. & Co Corp. & Ca Corp. \\ \hline Risk Free Rate & $4.00 \%$ & $3.00 \%$ & $2.00 \%$ & $3.50 \%$ \\ \hline Beta & 1.25 & 1.50 & 1.30 & 1.40 \\ \hline Market Return & $12.00 \%$ & $11.00 \%$ & $10.00 \%$ & $8.00 \%$ \\ \hline Debt to Equity Ratio & 2.5 & 3 & 4 & 3.5 \\ \hline Credit Spread (in BPS) & 200 & 300 & 250 & 150 \\ \hline \end{tabular} Solve: a. What is the cost of equity of each company? b. What is the after tax cost of debt of each company? c. What is the WACC of each company?

1) The book states that current asset management is an extension of concepts discussed in the previous chapter and involves the management of cash, marketable securities, accounts receivable, and inventory. We move from financial analysis (chapter 3) to working capital management and the financing decision (chapter 6) and now to current asset management (chapter 7). What is the difference between working capital management and current asset management and where does financial analysis fit it? 2) When looking at the Time Value of Money (chapter 9), why is this important to financial managers? How are the future value and present value of money related? What are some of the key items to consider when thinking about money over multiple time periods?

Suppose you are considering an ARM with the following characteristics: Mortgage Amount = $300,000                            Initial Contract Rate = 5.25% Interest Rate Caps = 2/6                      Margin = 2.50 Index = 1-year TB Yield with a value at the outset of 5% Index value at the end of year one and constant for the remaining term = 6.25% Discount Points = 2                                 Term = 30 years, Monthly Payments What is the APR for this loan? Please show steps without excel and explain how discount points affect apr. Thank you 

SunTech Corp. is a newly established US company. The current net income of the company is $23 million US dollars. The company has issued both preferred and common shares. No dividends will be paid on any of the shares over the next three years. (a) State one possible reason to explain why the company chooses not to declare dividends for the next three years. (2 marks) (b) Suppose the company will pay a dividend of $2.5 per common share four (c)  Suppose the company decides to pay a dividend of $2 per preferred share four years from now and maintains the practice forever. If the required rate of return is 10 percent, what is the price per preferred share three years from now? What is the current share price for the preferred stock? (4 marks) (d)  From the point of view of shareholders, name two differences between preferred and common stock. (4 marks)

(a) You are the manager for the investment portfolio of a US based manufacturing firm. Your boss has recently expressed an interest in diversifying the portfolio through investing in bonds. He has asked you to give a presentation on investing in corporate bonds. You have collected the following AAA-rated bonds information from your favourite financial website. All bonds have a par value of $1,000. Explain which of the following bonds you will choose if you expect the market interest rates will decrease by 100 basis points. No calculation is required. (4 marks) BondX ($)1,018.86 Coupon Rate:5% Maturity:2years  BondY ($)1,000.00 Coupon Rate:6% Maturity:2years BondZ ($)973.27 Coupon Rate:5% Maturity:3years   (b) HUS Enterprises would like to raise $40 million to invest in capital expenditures. The company plans to issue 10-year bonds for this purpose. The company is evaluating two issue alternatives: a bond paying coupons annually and a zero coupon bond. Both bonds will have a par value of $1,000. The company also believes it can get a rating of AA from Standard & Poor’s. The 10-year U.S. Treasury bond has a yield to maturity of 6.5% and the yield spread on 10-year AA-rated corporate bonds is 0.4%. i. What coupon rate should the company set on its new coupon bonds if it wants them to sell at par? (2 marks) ii. What is the issue price of zero coupon bond? (3 marks) (c) You are a professional bond trader. You analyze the following bond quotes appeared in the financial page of today’s newspaper and observe what seem to be several errors. All bonds have a par value of $1,000. Without calculating the price of each bond, explain whether the price of each bond is reported correctly. (6 marks) BondA $900 Coupon Rate: 9% YTM: 6% BondB $1,050 Coupon Rate: 0% YTM: 5% BondC $1,000 Coupon Rate: 6% YTM: 6%

1. Apa maksud dan tujuan modal kerja bagi perusahaan??2. Yang termasuk modal kerja perusahaan apa saja???

If a project's expected return is 10.50%, which represents a 29.60% return in a booming economy and a 6.90% return in a stagnant economy, what is the probability of a stagnant economy?

Question 2: (4 points) Janelle Heinke, the owner of Ha'Peppas!, is considering a new oven in which to bake the firm's signature dish, vegetarian pizza. Oven type A can handle 20 pizzas an hour. The fixed costs associated with oven A are $\$ 20,000$ and the variable costs are $\$ 2.00$ per pizza. Oven $\mathrm{B}$ is larger and can handle 40 pizzas an hour. The fixed costs associated with oven B are $\$ 30,000$ and the variable costs are $\$ 1.25$ per pizza. The pizzas sell for $\$ 14$ each. a) What is the break-even point for each oven? b) If the owner expects to sell 9,000 pizzas, which oven should she purchase? c) If the owner expects to sell 12,000 pizzas, which oven should she purchase? d) At what volume should Janelle switch ovens?

Capital Budgeting 1) Exercise The Investments Committee of an important food company is studying the possibility of building a new production line for botteled natural fruit juice. During the last year the company has produced small batchs of the product in a pilot production line and has conduced acceptance tests with selected clients obtaining very promising results. The new production line would be installed in factory facilities that the company already owns and does not use, and will only require some conditioning to install the new equipment. Operations Department: Batch Production Line for Bottled Juice Estimates -The Chief Operating Officer has provided the following detailed information: • Equipment and tooling (includes bottelling), 500000 euros. 0.5% prompt payment discount offer available. • Transportation of equipment, 5000 euros. Includes insurance. • Incurred costs for the pilot line, 75000 euros. Fee to be paid for project proposal to marketing consultancy included. • Conditioning of facilities, 25000 euros. Electrical work upgrade. • Depreciation, 5 years. Straight line depreciation schedule. • Residual value (selling price) of equipment, 150000 euros. Estimated. • Fixed Operating costs, 300000 euros. Full annual fixed costs including personnel and maintenance. • Variable Cost, 0.45 euros per bottle. Juice concentrate + recyclable bottles + packaging. Marketing & Sales: Natural Juice Estimates - Following the information provided by the Marketing department. • 1000000 bottles the first year of operations (net after returns). • 20 percent annual growth every year (units). • 0.9 euros per bottle (net after promotions & discounts). Finance & Administration: Natural Juice Project Estimates - Based on the information from Marketing and Operations, the finance and administration department has prepared the following assumptions in order to analyze the investment and prepare a financing proposal. • The company controller has estimated the requirements of Working Capital for the new operation: – receivables account amount will be estimated considering 90 average credit days – payables account amount will be estimated considering 30 average payable days – the inventory amounts needed to avoid out-of-stock lost sales will be estimated with 30 days of stock for raw materials and 15 days for inventory of finished product. For both cases inventory units are valued at variable cost of 0.45 euros per unit. Net working capital of the first year of operations will be considered an initial investment outlay (year zero), and the investment in working capital will be fully recovered the last year (year 5). • 5-years horizon project • applicable tax rate of 30 percent • 75 percent of debt and 25 percent of equity • the loan to be fully returned in 5 years with an equal payment amortization schedule. Interest rate will be 14 percent with flotation cost of debt of 0 percent. • the necessary equity will be raised by issuing new stock in the market. The dividend yield will be in line with that of equities with similar beta, 16 percent, and the flotation cost of equity will reach 6.25 percent that will be capitalized and amortized during the whole 5-years-life of the project. • reinvestment rate is 5 percent. • risk free rate 3 percent. • for risk analysis, will consider three scenarios for Net Present Value,       – optimist: 1.15×NPV with a probability of 40 %       – neutral: 1×NPV with a probability of 40 %       – pessimist: 0.85×NPV with a probability of 20 % • the utility function that will use for the firm is U = NPV2 Answer the following questions in the task questionnaire by Tuesday 21 of March at 23:59. Upload your excel file with the model and answers in the last question. (a) InvestmentProject.SelecttheelementsthatmakeuptheInitialInvestmentOutlayandcalculate the corresponding initial cash flow (cf0). Which is its value? (b) Investment Project. Working Capital. Whithin the initial investmet outlay, which is the amount needed for working capital? (c) Investment Project. Which is the investment cash flow generated the last year of operations (year 5), cf5, including the terminal cash flow ? (d) Financing Project. Which is the Debt Financing Cash flow of the first year of operations, cf1? (e) Financing Project. Which is the Equity Financing cash flow of the fourth year of operations? (f) Aggregated Project. Prepare the sequence of cash flows of the aggregated project. The sum of cash flow residuals of your model should be around 670159 euros (check your work in case obtain significantly different). Is the project financially balanced? (g) Which is the Net Present Value (NPV)? Use as discount rate a cost of capital of 12.37 percent. (h) Which is the Internal Rate of Return (IRR)? (i) Which is the Net Terminal Value (NTV)? Assume a reinvestment rate of 5 percent. (j) Calculate the pay-back period rounded-up to years. (k) Calculate the profitability index. (l) Risk Analysis. Which would be the NPV of the project if instead of using the cost of capital of 12.37 uses a discount rate estimated with the Capital Asset Pricing Model (CAPM) considering a risk premium (Market Return - Risk Free Rate) of 15 percent, a risk free rate of 3 percent, and a beta of 1.0? (m) Risk Analysis. The Certainty Equivalent of an uncertain cash flow is the minimum (certain) amount that an investor is willing to accept in exchange of the uncertain cash flow. Which is the certainty equivalent for the 206162 euros cash flow calculated for the third year of the investment project? Use for your calculation the Risk Adjusted Discount Rate estimated with the CAPM which is 18 percent, and the risk free rate of 3 percent. 2 (n) Scenario Analysis. Considering the optimistic: 115 percent of NPV, neutral: 100 percent of NPV and pessimistic 85 percent of NPV, together with their respective probabilities of 40, 40 and 20 percent, calculate the Expected NPV of the project. Use the NPV calculated with the cost of capital (question 7). (o) Scenario Analysis. Considering the same three possible scenarios, which is the volatility of the NPV? (p) Scenario Analysis and Utility Function. The risk preference of the firm is stated by its utility function. The utility of the certainty equivalent is equal to the expected utility of the uncertain value. Which is the certainty equivalent of the NPV?. (q) Which is the Risk Premium that relates the certainty equivalent of the NPV and the Expected NPV? (r) Has the investor either a risk averse or a risk seeking profile? (s) Sensitivity analysis. Which is the break even for units sold? Express as units to be sold in year one and growing at the 20 percent rate annually as stated in the model. (t) Upload your excel workbook which apart from your data, model and calculations should include one sheet with the answers only.

Tram Toy Ltd is a company which distributes and sells a popular toy train. The company, which is based in Australia, imports trains from the USA which it packages and sells in New Zealand and larger countries in the Far East. The company is also considering establishing a subsidiary in South Africa which would buy products from Tram Toy Ltd and sell within Africa. Tram Toy Ltd reports its results in its home currency. The company pays for its purchases from the USA in US dollars, but receives payment for the goods which it sells in Australia and the Far East in local currency. All transactions carried out with the subsidiary in South Africa would be in US dollars. The company generally takes 6 weeks to pay its supplier in the USA and receives payment from debtors within 3 months. Over the last few years the company has found that sales have been quite predictable and it has been possible to plan sales levels and purchases of goods in advance. However, there is increasing competition from companies in the Far East, which may make this more difficult in the future. Required: (a) The company is currently considering whether the foreign currency exposure could be managed more efficiently. Describe the following types of foreign currency exposure, giving examples of how they could impact Tram Toy Ltd, now and in the future: (12 marks) (i)Economic risk (ii) Translation risk (iii)Transaction risk (b) Describe the following approaches to managing or hedging transaction exposure and the disadvantages and advantages of each method: (12 marks) (i)Leading and lagging (ii) Matching (iii)Forward exchange contracts (iv)Currency options

8-11 CAPM AND REQUIRED RETURN Calculate the required rate of return for Mudd Enterprises assuming that investors expect a $3.6 \%$ rate of inflation in the future. The real risk-free rate is $1.0 \%$, and the market risk premium is $6.0 \%$. Mudd has a beta of 1.5 , and its realized rate of return has averaged $8.5 \%$ over the past 5 years.

Republic Company has the following financial reports: REPUBLIC COMPANY Balance Sheet December 31, 2020 REPUBLIC COMPANY Income Statement For the Year Ended December 31, 2020 REPUBLIC COMPANY Statement of Retained Earnings For the Year Ended December 31, 2020 Retained earnings, January Add: Net income Subtotal Less: Dividends paid Preferred stock Common stock Retained earnings, December 31 \begin{tabular}{rr} $\$ 2,600,000$ \\ $2,000,000$ \\ \hline $4,600,000$ \end{tabular} $\$ 240,000$ 360,000 600,000 Required: (Solutions/Answers must be handwritten.) a. Fill in the 2020 column ( $4^{\text {th }}$ column) in the table that follows. Assume that beginning balances and ending balances of specific assets are the same. Share price for the common stock was $\$ 270$ at year-end of $\mathbf{2 0 2 0}$ and book value per share was $\$ 300$. Present the formula and computation for each ratio.