Clam Shack is a seafood company based in Wellington. It currently has debt with a market value of $100,000. The company has a WACC of 9 percent and has EBIT of $9,000 in the next year. The tax rate is 20%. What is the growth rate of EBIT if the debt-value ratio is 50%? 7.2% 5.4% 8.4% 8.5%

Johnson Tire Distributors has debt with both a face and a market value of $90,000,000. This debt has a coupon rate of 7 percent and pays interest annually. The expected earnings before interest and taxes is a constant $50,000,000 in perpetuity. The company's tax rate is 25 percent, and the unlevered cost of capital is 25 percent. What is the firm's cost of equity? Write your answer as a percent rounded to two digits, but don't include the % sign (i.e. enter 12.63, not 0.1263). HINT: You need to use both M&M propositions. Numeric Response

answer quickly, Bruce & Co. expects its EBIT to be $100,000 every year forever. The firm canborrow at 11 percent. Bruce currently has no debt, and its cost of equity is18 percent. The tax rate is 31 percent.Given the above information;a) Complete the table given below for varying levels of debt below by usinga mix of the given information and using your own computations.EBIT $100,000Cost of debt 11%Cost of equity when unlevered 18%Tax rate 31%Debt $0 $10,000 $20,000 $30,000Cost of Equity when leveredEquityD/EVuVLWACCb) Plot the results from the table into the following two graphs:i) Value of the firm vis-à-vis- Total debtii) Cost of capital of the firm vis-à-vis D/E ratio.iii) Which MM propositions have you demonstrated?

Assume that CVC Corp.'s marginal tax rate is 35%, investors in CVC pay a 15% tax rate on income from equity and a 35% tax rate on interest income. CVC is equally likely to have EBIT this coming year of $20 million, $25 million, or $30 million. What is the effective tax advantage of debt if CVC has interest expenses of $8 million this coming year?

Stevenson's Bakery is an all-equity firm that has projected perpetual EBIT of $183,000 per year. The cost of equity is 13.1 percent and the tax rate is 21 percent. The firm can borrow perpetual debt at 6.3 percent. Currently, the firm is considering converting to a debt–equity ratio of .93. What is the firm's levered value? MM assumptions hold.   A. $829,786   B. $1,215,262   C. $1,155,579   D. $997,511   E. $921,985

Pfizer currently has a Net Profit Margin of 5%, its corporate tax rate is 21% and its annual interest payments are $6 million. How much do Pfizer’s sales need to be to produce a times interest earned (TIE) of 7.0?

Based on the following information, fill the information in the given below Income statement of a Company The company expects to sell 3000 units in the current year and the price per unit is 10 OMR. The variable cost per unit of the company is 4 OMR and the fixed cost is 6000 OMR. In the next year company expects to sell 6000 units. Calculate EBIT for the current year and the next year. The company also has a $30,000 bond with a 10% annual coupon rate and an issue of 500 shares of $4 annual dividend preferred stock. It also has 1,000 share of common stock outstanding. The tax rate for the Company is 40%. Fill out the given below Income statement and calculate the Degree of operating leverage Degree of Financial leverage Degree of Total leverage. YEAR 1 YEAR 2 Sales Quantity 3000 6000 Sales Revenue (in OMR)(selling price per unit is 10 OMR) Less: Variable operating costs( VC per unit is 4 OMR) Less: Fixed operating costs…

juanita's steak house has 12,000 of debt outstanding that is selling at par and has a coupon rate of 8%. the tax rate is 34%. what is the present value of the tax shield?