Use the Table for the Question(s)below

question 99

Multiple Choice

Use the table for the question(s) below.

-Banco Industries expects sales to grow at a rapid rate over the next 3 years,but settle to an industry growth rate of 5% in year 4.The spreadsheet above shows a simplified pro forma for Banco Industries.Banco Industries has a weighted average cost of capital of 12%,$50 million in cash,$60 million in debt,and 18 million shares outstanding.If Banco Industries can reduce their operating expenses so that EBIT becomes 12% of sales,by how much will their stock price increase?

• A)$2.80
• B)$3.36
• C)$4.98
• D)$8.89
• E)$10.12

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Definitions:

Police Power

The capacity of a state to regulate behaviors and enforce order within its territory for the betterment of the health, safety, morals, and general welfare of their inhabitants.

Public Health

The science and art of preventing disease, prolonging life, and promoting health through organized efforts and informed choices of society, organizations, public and private communities, and individuals.

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Morals refer to beliefs and values about what is right and wrong, guiding individuals' behavior and interactions within society.

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Checks and balances is a principle in government where separate branches are empowered to prevent actions by other branches and are induced to share power, ensuring no single branch becomes too powerful.