Consider the following income statement for Larry & Harry drug stores: Revenue - 90mm Variable costs- 48mm Interest on debt- 6mm Depreciation- 0 mm It’s tax rate is 25% and the book value of its equity is 150mm. What is L&H’s coverage ratio? A) 0.18 B) 5.25 C) 6 D) 7 E) 8 F)15
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- Profit Margin and Debt Ratio Assume you are given the following relationships for the Haslam Corporation: Sales/total assets 1.5 Return on assets (ROA) 4% Return on equity (ROE) 7% Calculate Haslam's profit margin and liabilities-to-assets ratio. Do not round intermediate calculations. Round your answers to two decimal places. Profit margin: _______ % Liabilities-to-assets ratio: ______% Suppose half of its liabilities are in the form of debt. Calculate the debt-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places. _______%The Doll House has a pre-tax cost of debt of 7.9 percent and a return on assets of 11.7 percent. The debt-equity ratio is 0.45. Ignore taxes. What is the cost of equity? A- 13.41 percent B- 12.98 percent C- 12.47 percent D-12.03 percent E-11.87 percentThe cost of debt for Salalah Mills is 15.25% (effective rate) and its tax rate is 30.05% then what is the after tax cost of debt? Select one: O a. 10.66% O b. 12.50% O c. 10% d. None е. 10.60%