14. Under what circumstances would you consider a corporate net income of P1million for The year as being unreasonably low? Under what circumstances would you consider a corporate profit of P1 million as being unreasonably high?
Q: X company has an unlevered cost of capital of 11%, a cost of debt of 8%, and a tax rte of 35%. What…
A: Debt-to-Equity ratio shows the proportion of debt capital including non-current liabilities and…
Q: 1) Suppose your firm earns $9 million in taxable income. What is the firm's tax liability? What is…
A: Hello. Since your question has multiple parts, we will solve first question for you. If you want…
Q: Q Corporation and R Inc. are two companies with very similar characteristics. The only difference…
A: Given data, Earnings before interest and taxes (EBIT) = $1.5 million Debt = $3.5 million Cost of…
Q: What would be the value of the firm if it issued $50 million in perpetual debt and repurchased the…
A: Value of the firm refers to the total value of either assets or equity and liabilities of a company.…
Q: cash
A: Formula to calculate the cash flow is: Cash flow = net income + depreciation - taxes + change in…
Q: The following extracts are from Hassan’s financial statements: Profit before interest and tax…
A: Return on capital employed is a ratio which calculates return as a percentage of total capital…
Q: Q Corporation and R Inc. are two companies with very similar characteristics. The only difference…
A: GIven, R Inc. = levered firm Debt = $3.5 million Cost of debt (Kd) = 10% EBIT = $1.5 million…
Q: If a corporation earns $370,000, and the payout ratio is 40%, what is the change in retained…
A: Total earnings=$370000Payout ratio=40%
Q: The Book Worm is an unlevered company with an aftertax net income of $118,406. The unlevered cost of…
A: An unlevered firm is a firm which does not have any debt in it and is completely financed through…
Q: Enoch-Arden Corporation has earnings before interest and taxes of OMR 3 million and a 40% tax rate.…
A: Answer: EBIT = OMR 3 million Tax rate = 40% Interest rate = 14%
Q: Yaya Inc. has earnings before interest and taxes of P4,750,000. The company’s total depreciation and…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: A5 7i Q Corporation and R Inc. are two companies with very similar characteristics. The only…
A: Derivation of the value of the unlevered firm - Q corporation: The value of Q corporation is given…
Q: Suppose the corporate tax rate is 30%. Consider a firm that earns $1,000 in earnings before interest…
A: Value of firms equity of the value of the sum provided by the shareholders to the firm as price of…
Q: 59) During the coming year, Gold & Gold wants to increase its free cash flow by $180 million, which…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: what is the Novavax, Inc.'s cost of equity capital?
A: Cost of equity refers to the cost incurred by the company for issuing new equity. When a company use…
Q: A firm paid R800 000 in dividends over the last period. The beginning and ending retained earnings…
A: Formula: Net income after taxes = Total dividends paid + Change in retained earnings
Q: A Corporation is planning to loan P20M at an effective interest rate of 10%. The company pays income…
A: Loan amount = P20,000,000 Interest rate = 10% Tax rate = 30%
Q: Q Corporation and R Inc. are two companies with very similar characteristics. The only difference…
A: There can be two types of firms based on their capital structure. The firm which is completely…
Q: Approximately how much does the outstanding debt cost shareholders every year? a. $50 b. $33 c.…
A: Outstanding debt arises due to debt owned by the company and that too for a long period of time. To…
Q: A company has 35% of its balance sheet as debt with a total amount of assets of EUR 17,000,000.If…
A: Weight of debt = 35% Weight of equity = 100% - 35% = 65%
Q: What is the sustalnable growth rate for a firm with net income of $2.5 million, cash dividends of…
A: Sustainable Growth Rate = Retention Ratio * Return on equity Retention Ratio = Retention Amount /…
Q: A firm paid R800 000 in dividends over the last period. The beginning and ending retained earnings…
A: A firm paid R 800 000 in dividends over the last period. The beginning and ending retained earnings…
Q: ppose a company named Arts Pvt. Ltd has taken a loan from a bank for business expansion at a rate…
A: Cost of debt is effective interest or cost incurred by company for deploying the debt.
Q: 13. Greenforest Industries has EBIT of $450 million, interest expense of $175 million, and a…
A: Solution:- Interest tax shield means the tax savings of an entity due to interest expense. So,…
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: What is the company’s after-tax weighted average cost of capital if Bulldogs Inc. pays taxes at the…
A: Capital Ratio Cost of capital Long-term liabilities 40% 10% Preferred stock 30% 10% Common…
Q: An all equity corporation has net income of $63,313and a required rate of return of 0.14%. What…
A: Given: Net income = 63313 Require rate of return = 0.14%
Q: If a corporation earns $240,000 and the payout ratio (proportion distributed) is 35 percent, what is…
A: Given : Income = $240,000Payout Ratio = 35% Dividends = Income * Payout Ratio…
Q: What is the company’s after-tax weighted average cost of capital if Bulldogs Inc. pays taxes at the…
A: Tax rate = 30% Particulars Weight Cost Long-term liabilities 40% 10% Preferred stock 30% 10%…
Q: 1. Under what circumstances would you consider a corporate net income of P1 million for the year as…
A: Net income refers to the amount that deducts the operating expenses from the gross income. The…
Q: A company’s Book Value is $75 million. Last year it produced an (after-tax) ROE of 20%. If its…
A:
Q: The EBIT of the unlevered company is OMR 8,000; value of unlevered company (Vu) is OMR 80,000 and…
A: Net income = EBIT - tax = OMR 8,000 - 8000 x 30% = OMR 5,600
Q: chapter 9 #4 Assume that a company borrows at a cost of 0.08. Its tax rate is 0.35. What is the…
A: Given data; cost of debt = 0.08 tax rate =0.35
Q: This topic is about Corporation (please check the problem in the picture) if a corporation makes a…
A: Shareholders Equity of the business means total amount attributable to the equity shareholders of…
Q: erhad has the following income statement items for 2021: Revenue/Sales RM4,801,139 Finance…
A: We need to compute earnings before tax.
Q: 4-What is the weighted average cost of capital for the firm with equal weights of debt and equity…
A: Weighted Average cost of capital calculates the cost of financing the assets of a company. It is…
Q: Assume a corporation has earnings before depreciation and taxes of $82,000, depreciation of $45,000,…
A: For calculating after tax cashflow of a company we add back deprecation to after tax income.
Q: A5 7f Q Corporation and R Inc. are two companies with very similar characteristics. The only…
A: Weighted Average Cost of Capital is used to calculate the firm's cost of capital. For calculating…
Q: A company retains 7,50,000 out of its current earnings. The expected rate of return to the…
A: Retained Earnings (RE) are the aggregate sum of a company's profits that are kept for internal…
Q: 1. If a firm's net income (profits before taxes) is $120,000 and it has total assets of $1.5…
A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: 1.A Financial Statement is not necessary for corporations over $10M in annual revenue. 2. It is…
A: Financial statements are those statements which show the health and earnings of the company. There…
Q: Refer to the corporate marginal tax rate information in Table 2.3 . b-1 Compute the average tax…
A: Tax refers to the amount that is charged by the government from the individual and organization on…
Q: b) The Moore Corporation has operating income (EBIT) of $750,000. The company’s depreciation expense…
A: Net income = (EBIT - interest) x (1 - tax rate)EBIT = $ 750,000As compnay is 100% equity finance,…
Q: 8. Velsicor Corporation has a 20% tax on corporate profits, its bondholders have a 35% personal tax…
A: Given Information Tax on Corporate Profits =20% Personal Tax Rate on Interest Income = 35% Personal…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- 1. Under what circumstances would you consider a corporate net income of P1 million for the year as being unreasonably low? Under what circumstances would you consider a corporate profit of P1 million as being unreasonably high? 2. Nets sales of the Premiere General Store have been increasing at a reasonable rate, but net income has been declining steadily as a percentage of these sales. What appears to be the problem?Q45 If the value of unlevered company (Vu) is OMR 180,000 and unlevered cost of equity (Ke) is 10%, then what is the EBIT of unlevered company under Modigliani-Miller Model? Assume that the corporate tax rate is 30%. a. OMR 25,714 b. OMR 12,600 c. OMR 36,000 d. OMR 18,000An all equity corporation has net income of $63,313and a required rate of return of 0.14%. What would the value of this firm be if it borrowed $141,848 to buy back some of its stock? Assume a corporate tax rate of 0.45%.
- Suppose a firm's tax rate is 25%. a. What effect would a$9.85 million operating expense have on this year's earnings? What effect would it have on next year's earnings? b. What effect would an $8.95million capital expense have on this year's earnings if the capital is depreciated at a rate of $1.79 million per year for five years? What effect would it have on next year's earnings?D6) Suppose there are perfect capital markets with taxes. Investors expect a company to have $120 earnings before interest and taxes in one year. This company has a 25% tax rate, $100 market value of debt, and 20 shares outstanding. This company’s net working capital, depreciation expense, and capital expenditures are all expected to be zero in perpetuity. Investors expect this company to have the same earnings before interest and taxes, market value of debt, tax rate, and number of shares outstanding in perpetuity. The firm’s unlevered cost of equity is 8% and its cost of debt is 5%. Based on this information, what amount would you expect this company’s share price to be closest to? $5 $20 $40 $80 $100 $200 $400You are given the financial information for the Unic Company: Earnings Before Interest and Tax (EBIT) = $126.58 Corporate tax rate (TC) = 0.21 Debt (D) = $500 Unlevered cost of capital (RU) = 0.20 The cost of debt capital is 10 percent. Question: Determine the value of Unic Company equity? Determine the cost of equity capital for Unic Company? Determine the WACC for Unic Company?
- Q5 The EBIT of the unlevered company is OMR 60,000; cost of equity of unlevered company is 8% and the corporate tax rate is 30%, then what is the value of unlevered company (Vu) under Modigliani-Miller Model? a. OMR 375,000 b. OMR 525,000 c. OMR 275,000 d. OMR 425,000In the Chart1. What percentage of 2000's disposable income is invested? 2. How much should be invested if you have $4,000 in cash? If a corporation holds $40 billion in bonds, $10 billion in preferred stock, and $20 billion in common stock... A. How much capital is it worth? B. How much would it theoretically take to manage it? C. Practically, how much would it take to control it?Q13 Which one of the following would reduce the cash balances of a business and not reduce the profit for the year? Select one: a. Dividends paid b. Interest paid c. Remuneration to directors d. Distribution costs
- you have developed the following pro forma income statement for your? corporation: it represents the most recent? year’s operations, which ended yesterday. a.if sales should increase by 25 ?percent, by what percent would earnings before interest and taxes and net income? increase? b.if sales should decrease by 25 ?percent, by what percent would earnings before interest and taxes and net income? decrease? q c.if the firm were to reduce its reliance on debt financing such that interest expense were cut in? half, how would this affect your answers to parts a and b?? sales $ 45,750,000 variable costs -22,800,000 revenue before fixed costs $ 22,950,000 fixed costs -9,200,000 ebit $ 13,750,000 interest expense -1,350,000 earnings before taxes $ 12,400,000 taxes (50%) -6,200,000 net income $ 6,200,00020. Novavax, Inc. has a market value of equity of 44524$. It borrows 8388$ at 6.7%. If the unlevered cost of equity is 11.5%, and corporate tax rate is 21% what is the Novavax, Inc.'s cost of equity capital?14. Assume the marginal corporate tax rate is 28%. The firm has no debt in its capital structure. It is valued at $92,393,301. What would be the value of the firm if it issued $50,000,000 in perpetual debt and repurchased the same amount of equity?