net income 24K Interest expense 5,000 Tax rate 25% Notes payable 27K Long-term debt 75K. Common equity 250K The firm finances with only debt and common equity, so it has no preferred stock. What are the firm’s ROE and ROIC? ROE = net income / common equity ROIC (return on invested capital) = EBIT(1-Tax) /  total invested capital  ROE = 24,000 / 250,000 ROE = .096 EBIT= sales revenue - operating costs Is my ROE right?

A firm with sales of $1,000,000, net profits after taxes of $60,000, total assots of $1,500,000, and totol liabilities of $750,000 has a return on equity ot Select one: O a. 15 percent. b. 20 percent. c. 4 percent. O d. 8 percent. e. None of the above

…Question in photo And return on equity is: 17.46% according to m and m proposition A. 13.09% B. 17.46% C. 13.16% D. 15% E. 16.70%

Solution for d, e, and f

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D4

Percent of capital structure: Preferred stock Common equity (retained earnings) Debt Additional information: Corporate tax rate 45 25 15% 40 35% Dividend, preferred $ 10.00 Dividend, expected common $ 5.50 Price, preferred $ 98.00 Growth rate 10% Bond yield 11% Flotation cost, preferred $ 8.20 $ 77.00 Price, common Calculate the weighted average cost of capital for Digital Processing Incorporated Note: Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places. Answer is complete but not entirely correct. Debt Preferred stock Common equity (retained earnings) Weighted average cost of capital Weighted Cost 7.15% 11.14x 7.86 X 26.15 %

Capital Structure Analysis The Rivoli Company has no debt outstanding, and its financial position is given by the following data: $ 45 6 ✔ Expected EBIT Growth rate in EBIT, gL Cost of equity, rs Shares outstanding, no Tax rate, T (federal-plus-state) a. What is Rivoli's intrinsic value of operations (i.e., its unlevered value)? Round your answer to the nearest dollar. 4500000✔✔ $ What is its intrinsic stock price? Its earnings per share? Round your answers to the nearest cent. Intrinsic stock price: $ Earnings per share: $ 4.50 b. Rivoli is considering selling bonds and simultaneously repurchasing some of its stock. If it moves to a capital structure with 35% debt based on market values, its cost of equity, rs, will increase to 12% to reflect the increased risk. Bonds can be sold at a cost, rd, of 8%. Based on the new capital structure, what is the new weighted average cost of capital? Round your answer to three decimal places. 9.9 % What is the levered value of the firm? What is the…

A firm has a cost of debt of 6.6 percent and a cost of equity of 12.1 percent. The debt-equity ratio is 78. There are no taxes. What is the firm's weighted average cost of capital? Multiple Choice 10.20% 8.07% 9.69% 8.94% 8.72%

atab=r1&sl=en&tl%3Dar&text%3DThe%20company's%20 = Google Translate The company's capital structure is as follows: Debt Weight 25%, Preferred Stock Weight 25%, Common equity Weight 50%. The cost of debt is 12%, the cost of preferred stock is 15% and the cost of common equity is 0.191. Calculate the company's weighted average cost of capital. Select one: a. 0.0655 b. 0.1255 C. All the given choices are not correct d. 0.1630 e. 0.1330 Clear my choice haykal almakha aldiyn 12 Type here to search Esc F1 F2 F3 F4 F5 F6 F7 F8 @ #3 24 * 2 T 3.