Need answer please The gross profit margin (gross profit/sales) ofABC, Inc. is 0.25, its operating profit margin(EBIT/sales) is 14%, its TATO ratio is 1.50x, andits COGS is $600,000. ABC's tax rate is 40%. If thefirm is an all-equity firm, calculate thecompany's ROA and ROE.

Approach to solving the question:Step 1: Figure out sales (revenue).Cost of Goods Sold (COGS) and…

Answered: The gross profit margin (gross…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 6P

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The gross profit margin (gross profit/sales) of ABC, Inc. is 0.25, its operating profit margin (EBIT/sales) is 14%, its TATO ratio is 1.50x, and its COGS is $600,000. ABC's tax rate is 40%. If the firm is an all-equity firm, calculate the company's ROA and ROE.
The Tip-Top Paving Co. has an equity cost of capital of 16.97%. The debt to value ratio is .6, the tax rate is 34%, and the cost of debt is 11%. What is the cost of equity if Tip-Top was unlevered? O a. 10.0%. O b. 16.0%. C. 12.0%. O d. 14.0%
Give typing answer with explanation and conclusion Fama's Llamas has a weighted average cost of capital of 11.5 per cent. The company's cost of equity is 16 per cent, and its cost of debt is 8.5 per cent. The tax rate is 35 per cent. What is Fama's debt–equity ratio?
Please answer multi-choice question in photo.
The ABCCompany has a cost of equity of 21.2 percent, a pre-tax cost of debt of 5.2percent, and a tax rate of 30 percent. What is the firmâ€™s weighted average costof capital if the proportion of debt is 65.6%?Note: Enter your answer rounded off to two decimal points.Do not enter % in the answer box. For example, if your answer is 0.12345 thenenter as 12.35 in the answer box.
The Tailgate Store has a cost of equity of 8.6 percent. The company has an after-tax cost of debt of 4.5 percent, and the tax rate is 39 percent. If the company's debt-equity ratio is .65, what is the weighted average cost of capital? 8.85% 9.10% 6.55% 7.15% 6.98%
A company finances its operations and growth opportunities, using common equity and debt. The debt-to-equity ratio of the CI Corp. is 0.2. If its cost of equity is 11%, and its pretax cost of debt is 4%, what comes closest to the company's WACC? The tax rate is 25%. 0000 14% 10% 6% 8.5%
Question: Fama's Llamas has a weighted average cost of capital of 9.5%. The company's cost of equity is 11%, and its cost of debt is 7.5%. The tax rate is 40%. What is the company's debt- equity ratio? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.)
Caddy manufacturing has a target debt equity ratio of .45. Its cost of equity is 10.3%, and its pre- tax cost of debt is 6.4%. If the tax rate is 21%, what is the company's WACC ? Pls type in computer! Thanks
A firm has a tax burden ratio of 0.85, a leverage ratio of 1.5, an interest burden of 0.9, and a return on sales of 12%. The firm generates $2 in sales per dollar of assets. What is the firm's ROE? (Do not round intermediate calculations. Round your answer to 2 decimal place.) ROE %
Given the information below on peer companies A-E, calculate the beta for company F if it has net debt/equity of 0.72 and a tax rate of 25%. 0.98 0.95 1.02 O 1.06 Company ABCDE Betal 1.23 1.18 1.05 0.95 0.91 Net debt / equity 1.45 1.24 0.85 0.59 0.45 tax rate 25% 25% 25% 25% 25%
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The gross profit margin (gross profit/sales) of ABC, Inc. is 0.25, its operating profit margin (EBIT/sales) is 14%, its TATO ratio is 1.50x, and its COGS is $600,000. ABC's tax rate is 40%. If the firm is an all-equity firm, calculate the company's ROA and ROE.