Question #2 (10 points) The recent 2021 financnial statements for CommX Corp. are below. The company expects to experience sales growth in 2022 of 12%. For 2022, assets and costs are expected to be proportional to sales, and debt and equity are not. The company expects to maintain its historical dividend payout ratio of 40%. 1) What is the company's 2021 return on equity? Answer 2) What is the company's 2021 return on assets? Answer 3) What is the internal growth rate for 2021? Answer 4) Calculate the external financing needed in 2022 to fund the expected growth. Answer Commx Corp. 2021 $ Total assets $ 12,750,000 Sales Costs & expenses Income before tax Taxes (25%) Net Income 15,000,000 13,350,000 1,650,000 412,500 1,237,500 Debt Equity 3,000,000 9,750,000 12,750,000 $ $ Question #4 (5 points) See below for information on AMGN Corp.'s income statement. In addition: --The company's dividend payout ratio is 30% of net income and the company has 200,000 shares outstanding. --It just paid a dividend of $1.35. The dividend is expected to increase by 5.0% next year (year 1), 4.0% in year 2 and then increase at a constant rate of 2.5% thereafter --Investors require an annual return of 12.0% on the stock --The current year income statement for AMGN is below 1) What is the market value of a share of AMGN's stock using the dividend discount model? Answ 2) What would the required return on the stock have to be for a price based on the dividend discount model to be $10? Answer AMGN, Corp. Revenue COGS Gross profit SG&A Depreciation Current year $ 7,500,000 4,250,000 3,250,000 1,125,000 375,000 1,750,000 550,000 1,200,000 300,000 $ 900,000 EBIT Interest EBT Tax @ 25% Net Income Question #2 (10 points) The recent 2021 financnial statements for CommX Corp. are below. The company expects to experience sales growth in 2022 of 12%. For 2022, assets and costs are expected to be proportional to sales, and debt and equity are not. The company expects to maintain its historical dividend payout ratio of 40%. 1) What is the company's 2021 return on equity? Answer 2) What is the company's 2021 return on assets? Answer 3) What is the internal growth rate for 2021? Answer 4) Calculate the external financing needed in 2022 to fund the expected growth. Answer Commx Corp. 2021 $ Total assets $ 12,750,000 Sales Costs & expenses Income before tax Taxes (25%) Net Income 15,000,000 13,350,000 1,650,000 412,500 1,237,500 Debt Equity 3,000,000 9,750,000 12,750,000 $ $ Question #4 (5 points) See below for information on AMGN Corp.'s income statement. In addition: --The company's dividend payout ratio is 30% of net income and the company has 200,000 shares outstanding. --It just paid a dividend of $1.35. The dividend is expected to increase by 5.0% next year (year 1), 4.0% in year 2 and then increase at a constant rate of 2.5% thereafter --Investors require an annual return of 12.0% on the stock --The current year income statement for AMGN is below 1) What is the market value of a share of AMGN's stock using the dividend discount model? Answ 2) What would the required return on the stock have to be for a price based on the dividend discount model to be $10? Answer AMGN, Corp. Revenue COGS Gross profit SG&A Depreciation Current year $ 7,500,000 4,250,000 3,250,000 1,125,000 375,000 1,750,000 550,000 1,200,000 300,000 $ 900,000 EBIT Interest EBT Tax @ 25% Net Income