If EBIT is 15,00,000, interest is 250000,corporare tax is 40 percent degree of financial leverage is a. 1:11 b. 1.20 c. 1.31 d. 1.41

Q: Suppose the company Powerland borrows the new $2 million debt as perpetual bonds at a 5% cost which…

A: A tax shield refers to a reduction in taxable income resulting from allowable deductions and…

Q: Question 7 Given are the following data: Cost of debt ro 6%; Cost of equity re 12.1%; Marginal tax…

A: The weighted average cost of capital can be calculated by multiplying the cost of capital by their…

Q: What is the amount of the annual interest tax shield for a firm with £3 million in debt that pays…

A: Interest payment. Given the loan value = pound 3 million  Interest payable =12%= So total interest =…

Q: 6. If EBIT equals $200,000 and interest expenses equals $30,000 and Tax rate is 50%. What is the net…

A: EBIT = $200,000 Interest expenses = $30,000 Tax rate = 50%

Q: Assume that dividends are taxed at your marginal tax rate of 38% while capital gains are taxed at…

A: The portion of the earnings per share that is given to the shareholder is termed as the dividend.

Q: Net WC Long-term assets Sum Debt 80 Equity $100 Sum $20 $40 60 Net WC Long-term assets 140 $160 $100…

A: MM theory theory tells about the market value of the firm based on that it says that value of the…

Q: STEP 2: Compute the PV of the following years as follow with giving data: after tax lease payment…

A: The difference between the current value of cash inflows and outflow of cash over a period of time…

Q: Debt/Equity of project= Tax Rate Levered equity Debt Issue IR= repayment of principal = Find NPV…

A: NPV stands for Net Present Value which refers to the difference among the PV of the cash outflows as…

Q: If the company’s Interest on Debt is OMR 50,000 with 10% interest rate, the market value of Equity…

A: According to this approach, the valuation of a firm is not dependent on its capital structure (i.e.…

Q: If the after-tax rate of return for a cash flow series is 11.2% and the corporate effective tax rate…

A: The after-tax rate of return is the rate a project generates after taking the effect of the tax. It…

Q: The forecasts of Midway Limited for 2023 included Operating expenses R980 000, Interest expense R35…

A: Profit After tax is determined after deducting tax amount from profit before tax.Here, Tax rate =…

Q: Weighted Average Cost of Capital (WACC) using Table (Problem 11 in text) Financing Source Dollar…

A: WACC is the average cost of capital. It can be calculated by using equation below.WACC = Weight of…

Q: Given the following information: Total assets = $2,000,000 Debt = 40%, Equity = 60% Cost of equity =…

A: WACC will be considered as the required return rate which is the average of the cost of capital when…

Q: A bank has 100 in assets and 60 in liabilities. Suppose assets pay on average 6% and liabilities…

A: Expected rate of return on capital It is calculated as shown below. Expected rate of…

Q: 4. LSP Inc. reported the following financial facts at the year-end Dec 2018. Total Interest-Bearing…

A: Based on the information available we will calculate the net income, taxes, and other costs.

Q: Example 1: Find the Net Present Value assuming cost of capital is 10 %? Year Cash Flow Rs.…

A: The given problem can be solved using NPV function in excel.

Q: to the nearest integer.) More info Corporate Tax Rate Schedule Taxable income brackets Base tax $o…

A: Marginal tax rate refers to the extra tax paid for every extra dollar gained by an entity.

Q: Given the followind data, please calculate Microsoft's tax effected WACC Enterprise Value $2,125…

A: Given: Particulars Rate Amount Debt 3.00% $325 Equity 6.00% $1,800 Total   $2,125

Q: What will be the cost of capital, after tax, for a company with 60% debt and 40% equity split if…

A: The cost of capital is calculated by taking the weighted average of the after-tax costs of a…

Q: Assume a corporation has earnings before depreciation and taxes of $126,000, depreciation of $42,000…

A: Cash flow refers to the amount of cash or cash-equivalents that flow in and out of a business or…

Q: hat is the amount of the annual interest tax shield for a firm with $5 million in debt that pays 10%…

A: Value of Debt = d = $5 millionInterest Rate = r = 10%Tax Rate = t = 40%

Q: i) PAT -  4000 Cr ii) Tangible Fixed Assets -3300 Cr iii) Depreciation 8.5 % iv) Identifiable…

A: PAT -  4000 Cr Tax rate – 20 % Tangible Fixed Assets -3300 Cr Identifiable Intangible other than…

Q: what is a suggestion concerning the proprtion of debt that the firm should utilize in capital…

A: Capital structure of a firm is the debt equity structure in the company’s financing. An optimal…

Q: 39. In Geri Co, the 5 year weighted average historical pre-tax economic earnings are $1,250,000. The…

A: Calculate Cap Rate: ​Given:Weighted Average Historical Pre-tax Economic Earnings = $1,250,000Tax…

Q: Answer the following questions based on the information in the table. Assume a tax rate of 30…

A: Calculation of company's ROE, ROA and ROIC:  ABC1  Atlantic corporation Pacific corporation 2EBIT…

Q: Refer to the following financial information of Scholz Company:   NOPAT…

A: Economic value added (EVA) = Net operating profit after tax - Total invested capital x WACC  where,…

Q: A business is generating $100,000 annually over 10 years, with a salvage value of $1,000,000 in the…

A: Use the table below: Cost 10.00%     Cash flows Year Discounted CF = Cash flow/(1+cost)^year…

Q: If the cost of debt before tax is 8% and the corporate tax rate is 15%; then what would be the cost…

A: Part of cost of debt after tax=100-Rate of tax%=100-15%=85%

Q: Assume the Canadian dollar rose from US$0.9475 to US$0.9875. A client owns an investment that pays…

A: old value = US$0.9475 New value = US$0.9875 Interest rate = 6%

Q: Find FCFF Revenue =247 cost =12 depreciation = 13 tax rate = 25%  Capex =123 change in working…

A: FCFF = NOPAT + D&A – CAPEX – Changes in net WC

Q: Assume that cost of debt = 8%; unlevered cost of capital = 10%; systematic risk of the asset is 1.5.…

A: Value of unlevered firm can be calculated using,EBIT = 10000Tax = 34%kUL=10% (unlevered cost of…

Q: Incorporated has $3 billion in assets, and its tax rate is 25%. Its basic earning power (BEP) ratio…

A: Let is make the calculations. Times interest earned =EBITInterest Expense So, we have to calculate…

Q: 12. Colter Steel has $5,250,000 in assets. Temporary current assets Permanent current assets. Fixed…

A:

Q: Find the degree of financial leverage of a business having earnings before interest and taxes of…

A: Financial Leverage is firms ability to use fixed financial charges to magnify effect of changes in…

Q: Ramos Land Management has a target debt - to - value ratio of .45. The pretax cost of debt is 7.4…

A: It is a financial concept that refers to the expected rate of return that a company's shareholders…

Q: A firm recorded EBIT of $20,000,000; debt of $15,000,000; and assets of $25,000,000. The firm has…

A: Return on Assets (ROA)It is a financial metric used to determine company's efficiency in a…

Q: If the value of unlevered company (Vu) is OMR 180,000 and unlevered cost of equity (Ke) is 10%, then…

A: EBIT means earning before interest and taxes. Unlevered firm means a company who do not have any deb…

Q: D=R-(Rx T) or D= Rx (1-T) Assume that Bob's Sporting Store borrows $100,000 at an interest rate of…

A: The cost of each specific source can be defined as the percentage of the minimum required return…

Q: In how long does a capital invested at 5% simple annual interest grow 24%? a.4.8 b.5.2 c.6…

A: Simple Interest formula  = P * R * T  where P = Principle R = Rate of interest T = Time

Q: If the property before tax cashflow (PBTCF) in a given year is $125,000, total debt service is…

A: The Equity after tax cash flow of the investor is that income after deducting all expenses and tax.

Q: 14. Given: S- SF2/S, F-SF1.90 /S, R (US) = 10% and R (S)- 5% and a starting amount of $5 million,…

A: Spot rate = SF1/$Forward rate = SF1.90/$ Interest rate for dollar = 10% Interest rate for franc = 5%