1. SLYMN Enterprise has P/E ratio of 12 and a dividend payout ratio of 40%. If its equity cost of capital is 16%, what growth rate is its P/E ratio consistent with?
a. 8%
b. 9%
c. 10%
d. 11%
2. books in, purchases a new machine for $100,000 that is to be depreciated on a straight line basis over 10 years. After 6 years, Books inc sells the machine for $90,000. If the capital gains tax rate is 40% what is the cash inflow from the sale?
a. $21,000
b. $25,000
c. $28,000
d. $30,000
please show all the working on how you derived to the solution and make sure the answer is 100% correct.