Sonova corporation has an operating income of $240000 and a 40% tax rate The firm has short term debt of $115000 Long term debt of $321000 And common equity of $436000 What of the return on invested capital?
Q: Compare the pros and cons of futures, forwards, and options. What are the criteria for the…
A: Derivatives are financial instruments whose values are derived from the performance of underlying…
Q: In 2006 and 2007, Kenneth Cole Productions (KCP) paid annual dividends of $0.76. In 2008, KCP paid…
A: a.Risk free equity cost of capital, r = 5.5%Dividend in 2006 & 2007 = $0.76Dividend for 2008 =…
Q: Ceylon Coffee Vendors PLC is a company that installs and supplies coffee vending machines in…
A: Calculation used to evaluate the investment and financing decisions that involve cash flows…
Q: A company’s stock currently sells for $21.25 per share. The stock’s dividend is projected to…
A: The dividend discount model will be used here. As per the dividend discount model the intrinsic…
Q: Asset management ratios are used to measure how effectively a firm manages its assets, by relating…
A: Turnover ratios, also known as efficiency ratios or activity ratios, are financial metrics that…
Q: 5. Determine what amount a principal of $122,000 produces, at an interest rate of 14% per year…
A: Future value is the ultimate value of an asset that an investor expects to receive from his…
Q: uestion a .A mining company plans to mine a beach for rutile. To do so will cost $14 million up…
A: MIRR is the modified form of internal rate of return in which it is assumed that reinvestment rate…
Q: Financial Mathematics Please answer all parts of the question Suppose you will receive $50,000 in…
A: The concept of time value of money will be used and applied here. As per the concept of time value…
Q: e risk-free rate of return is 6 per cent. The market rate of return is 12 per cent with a standard…
A: Portfolio is the combination of stocks in a portfolio in different proportions and the return of the…
Q: The market value of the company is $60 mil, and it plans to raise and invest $30 mil in new…
A: WACC is a discounting rate, The WACC is used to calculate today's or current value of a company's…
Q: For 2022, You're Doing Great Corporation reported $22 million in sales and $19 million in operating…
A: Economic value added refers to the value added by the business operations and working of the company…
Q: Suppose that you buy a 1-year maturity bond with a coupon of 7.4% paid annually. If you buy the bond…
A: Given information,Coupon rate:Inflation rates: , , To calculate,Real rate of return
Q: The following financial information is available on Rawls Manufacturing Company: Current per share…
A: The cost of equity refers to the rate of return that a company's shareholders expect to receive on…
Q: For her daughter's university education, Carla Hackl has invested an inheritance in a fund paying…
A: The present value is the present worth of the amount that will be paid or received in the future.
Q: When a depreciable asset is sold, with no proceeds (i.e., sold for zero), then it can be ignored for…
A: A depreciable asset is a tangible or intangible asset owned by a business that has a finite useful…
Q: Problem 4: Planning for Life Right after graduating from LSU, you get your dream-job with a starting…
A: Salary $ 1,00,000.00Growth5%Tenure30Contribution to 401 K account15%
Q: Sure Tea Company has issued 6.3% annual coupon bonds that are now selling at a yield to maturity of…
A: Step 1The amount owed and due to be paid to the holder of a financial obligation as of the…
Q: YOUR BANK is thinking to issue a regular coupon bond (debenture) with the following particulars:…
A: Bonds are debt instruments issued by companies. The issuing company pays periodic coupons or…
Q: Q1- Omer purchase a new equipment to be used in his recently established factory. If the equipment…
A: Note:Since you have posted multiple questions, we will provide the solution only to the first…
Q: (Loan amortization) To buy a new house, you must borrow $135,000. To do this, you take out a…
A: Loan amortization refers to the systematic repayment of a loan over a specific period of time. It…
Q: Create the amortization schedule for a loan of $4,000, paid monthly over two years using an APR of 9…
A: Here,LoanAmount is $4,000Time Period is 2 yearsAPR is 9%
Q: 2. Ellen purchased $3,268 worth of stock and paid her broker a 0.6% fee. She sold when the stock…
A: Net proceeds is the amount of profit earned from the market after making an investment in the stock…
Q: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a…
A: Given:Required:Sharpe ratio=?
Q: In the absence of market imperfections and taxes, stock repurchases are same as cash dividends. How…
A: Two common ways companies distribute profits to their shareholders are through cash dividends and…
Q: The composition of the Fingroup Fund portfolio is as follows: Stock A 8 Shares 200,000 300,000…
A: The Net Asset Value (NAV) of a mutual fund is the price per share at which investors can buy or sell…
Q: Daily Enterprises is purchasing a $10.0 million machine. It will cost $50,000 to transport and…
A: Incremental earnings, often referred to as incremental net income or incremental profit, represent…
Q: Suppose you are in the 35% tax bracket (because you make $210,000) and have $6000 to put into a…
A: A traditional IRA is a retirement savings account that offers tax benefits. When you contribute…
Q: in two accounts, which pay & 2 and 10% interest 120% of the amount invested at 72. After 4 years,…
A: The problem case focuses on identifying the amount of investment done at different rates to achieve…
Q: (a) Construct a data table that will show Lindsay the balance of her retirement account for various…
A: We can answer questions a and b using the FV of annuity formula below. In question a we need to…
Q: Ocean power technologies $300 million common equity 12.2 million shares of common stock outstanding…
A: Market Value Added (MVA) means the difference between the market value of a firm and its common…
Q: Perth International Co., an Australian multinational company, forecasts 63 million Australian…
A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…
Q: Nikita Enterprises has bonds on the market making annual payments, with eight years to maturity, a…
A: Here,Par Value of Bond is $1,000Current Value of Bond is $962YTM is 5.1%Time to Maturity is 8 years
Q: Tony is offering two repayment plans to Phil for a long overdue loan. Offer 1 is to receive a visit…
A: We take loans when we have a cash crunch or when we need funds to buy something like a car, a house,…
Q: Troy Industries purchased a new machine 2 year(s) ago for $78,000. It is being depreciated under…
A: Variables in the question:New machine purchased 2 year(s) ago for $78,000Depreciation under MACRS…
Q: Beryl's Iced Tea currently rents a bottling machine for $50,000 per year, including all maintenance…
A: We have to calculate the Free cash flow ( FCF ) of each case and then calculate the NPV ( net…
Q: Kirk Van Houten, who has been married for 24 years, would like to buy his wife an expensive…
A: As per our guidelines we are supposed to answer only one question (if there are multiple questions…
Q: During the last four years, ADL Co. had the following stock prices at the end of each year (starting…
A: Semi-variance is a measure of downside risk or volatility that focuses on the observations or data…
Q: expected rate of return of 10%. Required: You manage a risky portfolio with an expected rate of…
A: Information provided:Risky portfolio rate of return (Re) = 12%Risky portfolio standard deviation…
Q: To fight inflation, another monetary policy tool the Fed could use is to change the reserve…
A: Inflation is the continuous increase in prices of goods and this is not good for economy as whole.
Q: A US investor wishes to invest in a British firm currently selling for GBP 40 a share. He has $10…
A: As per the given information:Investment Amount Investment Amount $ 10,000.00Exchange…
Q: Time value Personal Finance Problem As part of your financial planning, you wish to purchase a new…
A: TVM refers to the concept where money earned earlier is considered more valuable than the same…
Q: 0. Capital Budgeting involves managing risks associated with long-term liabilities. T/F
A: The problem statement wants to identify the focus of the capital budgeting and the work done under…
Q: Why do we need a foreign exchange ma
A: Foreign exchange market is where one can buy and sell currencies of other countries and convert…
Q: What is the value of the stock based on the dividend discount model? If the price of the stock in…
A: We can determine the intrinsic price of the stock using the formula below:If the intrinsic price is…
Q: Bank A pays 10% compounded annually, and bank B pays 10% simple interest. If you want to double your…
A: Compound InterestFuture value can be calculated usingFV = PV* (1 + r / n)ntWhere,PV = Present…
Q: The Dudumwezi city Council is a considering the introduction of speed trains in order to deal with…
A: Carrying out a cash flow analysis is crucial in project finance for several reasons. It helps…
Q: If you have a car loan with a monthly payment of $625.00 and a purchase price of $30,000 : a. How…
A: Given information,Monthly payment: Purchase price: Number of periods: yearsCompounding frequency:…
Q: Calculate the present value of a loan that could be cleared by payments of $3,350 at the end of…
A: Here,Semi Annual Payments (PMT) is $3,350Time Period (n) in years is 7 yearsInterest Rate (r) is…
Q: uppose that the borrowing rate that your client faces is 8% Assume that the equity market index has…
A: Risk aversion is a human nature. Investor with risk aversion nature prefers lower return with low…
Q: (Net present value calculation) Big Steve's, makers of swizzle sticks, is considering the purchase…
A: NPV refers to the net present value which is a capital budgeting technique used to evaluate various…
Step by step
Solved in 3 steps with 1 images
- A firm has EBIT of $7.5 million, a 33% tax rate, a weighted average cost of capital of 8.95% and total capital (long-term debt and equity) of $55 million. What is their economic value added (EVA)? $102,500 $112,667 $165,500 $3,264,250Give typing answer with explanation and conclusion Suppose Abraxas Corp. has an equity cost of capital of 8.2%, market capitalization of $11.37 billion, and an enterprise value of $17.12 billion. Suppose Abraxas's debt cost of capital is 5.6% and its marginal tax rate is 21%. What is Abraxas's WACC?You have the following data for your company. Market Value of Equity: $520 Book Value of Debt: $130 Required rate of return on equity: 12% Required rate of return on debt (pre-tax): 7% Corporate tax rate: 25% The company's debt is assumed to be is reasonably safe, so the book value of debt is a reasonably approximation for the market value of debt. What is the weighted average cost of capital for this company?
- You are analysing NBM firm and obtained the following information: FCFF reported as R198 million, interest expense is R15 million. If the tax rate is 35% and the net debt of the firm increased by R20 million, what is the approximate market value of the firm if the FCFE grows at 3% and the cost of equity is 14%? R1,950 billion R2,497 billion R2,585 billion R3,098 billion R 1,893 billionIt is known that a firm’s Net Operating Profit After Tax (NOPAT) is $58,000 and its Economic Value Added (EVA) is $18,000. What is the firm’s Weighted Average Cost of Capital (WACC) if its debt is $150,000 and equity is $250,000?A firm has EBIT of $30 million. It has debt of $100 million and the cost of debt is 7%. Its unlevered cost of capital is 10% and tax rate at 35%. a) What’s its unlevered firm value? b) What’s its levered firm value? c) What’s its equity value?
- A firm has a profit margin of 15 percent on sales of GHS20,000,000. If the firm has debt of GHS7,500,000, total assets of GHS22,500,000, and an after-tax interest cost on total debt of 5 percent, what is the firm?s ROA? O A. 8.4% B. 10.9% O C. 12.0% D. 13.3% E. 15.1%Dillon Labs has asked its financial manager to measure the cost of each specific type of capital as well as the weighted average cost of capital. The weighted average cost is to be measured by using the following weights: 30% long-term debt, 10% preferred stock, and 60% common stock equity (retained earnings, new common�� stock, or both). The firm's tax rate is 23%. Debt : The firm can sell for $1030 a 14-year, $1,000-par-value bond paying annual interest at a 8.00% coupon rate. A flotation cost of 2% of the par value is required. Preferred stock: 9.00% (annual dividend) preferred stock having a par value of $100 can be sold for $92.An additional fee of $2 per share must be paid to the underwriters. Common stock: The firm's common stock is currently selling for $90 per share. The stock has paid a dividend that has gradually increased for many years, rising from $2.00 ten years ago to the $3.26 dividend payment, D0, that the company just recently made.…Dillon Labs has asked its financial manager to measure the cost of each specific type of capital as well as the weighted average cost of capital. The weighted average cost is to be measured by using the following weights: 30% long-term debt, 10% preferred stock, and 60% common stock equity (retained earnings, new common stock, or both). The firm's tax rate is 23%. Debt : The firm can sell for $1030 a 14-year, $1,000-par-value bond paying annual interest at a 8.00% coupon rate. A flotation cost of 2% of the par value is required. Preferred stock: 9.00% (annual dividend) preferred stock having a par value of $100 can be sold for $92.An additional fee of $2 per share must be paid to the underwriters. Common stock: The firm's common stock is currently selling for $90 per share. The stock has paid a dividend that has gradually increased for many years, rising from $2.00 ten years ago to the $3.26 dividend payment, D0, that the company just recently made.…
- As an Analyst you were tasked to compute for the Weighted Average Cost of Capital of variouscompanies given the following information. Income tax rate is 25% a. What is the cost of equity of each companies?b. What is the after tax cost of debt of each companies?c. What is the WACC of each companies? W Corp A Corp Co. Corp Ca Corp Risk Free rate 4.00% 3.00% 2.00% 3.50% Beta 1.25 % 1.50% 1.30% 1.40% Market Return 12.00% 11.00 % 10:00% 8:00% Debt to Equity Ratio 2.5 3 4 3.5 Credit Spread om BPS 200 300 250 150A firm has a total market value of $10 million while its debt has a market value of $4 million. What is the after-tax weighted average cost of capital if the before-tax cost of debt is 10% the cost of equity is 15%, and the tax rate is 21%? Multiple Choice A) 10.4% B) 8.8% C) 12.2% D) 13.0%Dillon Labs has asked its financial manager to measure the cost of each specific type of capital as well as the weighted average cost of capital. The weighted average cost is to be measured by using the following weights: 40% long-term debt, 15% preferred stock, and 45% common stock equity (retained earnings, new common stock, or both). The firm's tax rate is 26%. Debt The firm can sell for $1005 a 13-year, $1,000-par-value bond paying annual interest at a 6.00% coupon rate. A flotation cost of 2.5% of the par value is required. Preferred stock 7.00% (annual dividend) preferred stock having a par value of $100 can be sold for $98. An additional fee of $5 per share must be paid to the underwriters. Common stock The firm's common stock is currently selling for $80 per share. The stock has paid a dividend that has gradually increased for many years, rising from $2.50 ten years ago to the $4.92 dividend payment, D0, that the company just recently made. If…
