19. SPLI, Inc. has a Debt to Equity Ratio of 3:1. After tax cost of debt is 5% while cost of equity is 10%. The Board of Directors of the company decided to sell 100% of the company for Php 1 Billion. Compute for the projected monthly average earnings assuming an EVA of Php 57,500,000.00 a. Php 37,500,000.00 b. Php 10,000,000.00 c. Php 120,000,000.00 d. Php 100,000,000.00

Q: The Pawlson Company's year-end balance sheet is shown below. Its cost of common equity is 14%, its…

A: WACC stands for Weighted Average Cost of Capital, which is defined as the computation of the cost of…

Q: The Paulson Company’s year-end balance sheet is shown below. Its cost of commonequity is 14%, its…

A: cost of common equity = 14.00% before tax cost of debt = 10% Tax rate = 40% Total debt = $1167…

Q: The financial breakeven point of Soillnc. is P90,000,while the tax rate applicable to the company is…

A: The financial breakeven can be calculated by using this equation EBITFinBE =Interest cost +Preffered…

Q: National Co. has an ROE of 15 percent, a debt ratio of 40 percent, and a profit margin of 6 percent.…

A: The requirement is to compute the company's sales where is given that the company's ROE is 15…

Q: Shifa LLC has 2000000 shares at the current market price of OMR 3.570 each. It also has OMR 1000000…

A: The weighted average cost of capital is the cost of raising capital from the various sources of…

Q: TRY Co., a company with 25% tax rate, has a free cash flow of P150,000,000 for the next year and is…

A:

Q: Once Bitten Corp. uses no debt. The weighted average cost of capital is 5.2 percent, and the…

A: value of equity = EBIT in perpetuity / cost of capital

Q: International Cargo Inc. which is subjected to 20% tax rate employs residual dividend policy to its…

A: Introduction Residual dividend policy : Under this company uses earnings to pay capital expenditures…

Q: International Cargo Inc. which is subjected to 20% tax rate employs residual dividend policy to its…

A: To compute the dividend yield, it is necessary to calculate those variables that are major…

Q: Pomelo Company's ROE last year was only 3%; but its management has developed a new operating plan…

A: Net Income = (EBIT - Interest) x (1 - Tax Rate) Total Assets = Sales / Total Assets Turnover Ratio…

Q: A stock market analyst has forecasted the following year-end numbers for Nation al Co.: Sales P70…

A:

Q: Rain company whose tax rate is 40% has a total asset of P500,000,000 and earnings before interest…

A: Interest Payment is calculated on the debt part out of the total funds of the company. Net Income is…

Q: Consider a firm with an EBIT of P552,000. The firm finances its assets with P1,020,000 debt (costing…

A: Earnings per share is the part of the earnings that is allocated by the company to its common…

Q: PCC Inc has a debt-to-equity ratio or 3:1. After tax cost of debt is 5% while cost of equity is 10%.…

A: As per the guidelines, only one question is allowed to be solved. Please resubmit the question…

Q: Whacko Corporation has the following book value balance sheet ($mil) for the year just ended:…

A: Cost of capital is the cut-off rate or minimum rate required to earn on the investment by analyzing…

Q: Skolits Corp. has a cost of equity of 11.8 percent and an aftertax cost of debt of 4.44 percent. The…

A: Weighted Average Cost of Capital is defined as financial metric, which used to help in the…

Q: An entity reported an EBIT of $55,200.The firm finances its assets with $102, 000 debt (costing 5.7…

A: Earnings per share is the amount distributed by the company for every single share held by the…

Q: Leonardo Co. has a debt to equity ratio of 0.65.  The company is considering a new plant that will…

A: Weight of debt = Debt / (1+ debt) Weight of debt = 0.65/1.65 Weight of debt =39.39% Weight of equity…

Q: Blue Co., a company with 25% tax rate, has a free cash flow of P150,000,000 for the next year and is…

A: FCF1 = P 150,000,000 Growth rate (g) = 4% Debt to equity (D/E) = 0.25 Cost of debt = Rd = 5% Cost of…

Q: Thrice Corp. uses no debt. The weighted average cost of capital is 9.9 percent. The current market…

A: Weighted Average Cost of Capital = 9.9% or 0.099Market Value of the Equity = $18,500,000Tax Rate =…

Q: Last year Jullan Corp. had sales of P302,225 operating costs of P267,500 and year-end assets of…

A: Ratio is a tool which is used to measure the firm’s performance by establishing relation of…

Q: Rian Corporation is currently working without using debt. The estimated operating profit per year is…

A: The capital structure refers to the combination of different sources of capital and the propertion…

Q: Gagah Motors Enterprise., a producer of turbine generators, is in this situation: EBIT = RM4…

A: In the given question we require to compute Gagah’s earning per share (EPS) , Price per share and…

Q: PWC Inc. has a policy of distributing 30% of its current year income after interest and taxes. Which…

A: Company's earning after interest and taxes are divided into two parts i.e. dividend payout and…

Q: National Co. has an ROE of 15 percent, a debt ratio of 40 percent, and a profit margin of 6 percent.…

A: The ratio analysis helps to analyse the financial statements of the business.

Q: s ALAM group financed using the following weights: 35% long term debt, 15% preferred stock and 40%…

A: WACC (weighted average cost of capital) refers to the average cost that is paid by a company to…

Q: Pacific Packaging’s ROE last year was only 5%, but its managementhas developed a new operating plan…

A: Given information: Debt to capital ratio is 40%, Annual interest charges is $561,000 EBIT is…

Q: Consider a firm with an EBIT of P552,000. The firm finances its assets with P1,020,000 debt (costing…

A: EPS (Earning Per Share)  = Net Income / Outstanding Shareholder's

Q: WICO Databank Limited has a debt-equity ratio of 0.45. The required return on the company's…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Choose the correct letter of answer: In the current year, Company A had P15 Million in sales, while…

A: Ratio analysis means where different ratio of various years of years companies has been compared and…

Q: The tax rate applicable to Ivan Co. is 20%. The firm pays 5% interest on the P350,000 outstanding…

A: Interest paid = Face value of Loan * Interest rate =350000 * 5% = 17500

Q: Enya Company is planning to repurchase part of its common stock by issuing corporate debt. As a…

A: Repurchasing the shares means buying back the shares. In this, firm can use debt or cash to buyback…

Q: Evarista Inc. has projected average earnings every year of P5,000,000.00. Debt to equity ration is…

A: Weighted average cost of capital = Cost of debt x debt to equity ratio + Cost of equity x debt to…

Q: SPLI, Inc. has a Debt to Equity Ratio of 3:1. After tax cost of debt is 5% while cost of equity is…

A: Economic Value Added (EVA): It is a measure that can be calculated by subtracting the cost of…

Q: Perfect World Corp. is unlevered and is valued at $640,000. The company is currently deciding…

A: Since, more than three sub-parts are asked at a time, the answer for first three sub-parts is…

Q: Packaging's ROE last year was only 4%, but its management has developed a new operating plan that…

A:

Q: The Paulson Company's year-end balance sheet is shown below. Its cost of common equity is 16%, its…

A: Data given: Cost of equity(Ke) = 16% Before-tax cost of debt (Kd) = 8% Tax rate (T) = 25% Total debt…

Q: Once Bitten Corp. uses no debt. The weighted average cost of capital is 5.2 percent, and the…

A: EBIT are returns available to an entity before paying any cost of finance to debtholders. EBIT shows…

Q: Consider the following information for Federated Junkyards of America. Debt: $80,000,000 book value…

A: Given:Debt=$80000000 book value outstandingtrading at 95% of book valueyield to…

Q: Consider a firm with an EBIT of P552,000. The firm finances its assets with P1,020,000 debt (costing…

A: The term EBIT stands for earnings before interest and tax, and this is the income that the company…

Q: The ROE of the Midwest Corporation last year was only 3%. [Note: This information is irrelevant in…

A: The return on equity is the percentage earned on the equity investment made by the company. It shows…

Q: The financial breakeven point of Soil Inc. is P90,000, while the tax rate applicable to the company…

A: Interest paid = Outstanding loan * Interest rate = 200000*10% = P20000

Q: Robert Downey is the new finance manager in Avengers Corporation. The companies were considering…

A: The Weighted Average Cost of Capital(WACC) refers to the concept of financial ratio which dictates…

Q: 12. Ernesto, Inc has projected average earnings every year of Php 100,000,000. Debt to Equity Ratio…

A: Economic value added (EVA) = NOPAT – (WACC × Capital invested) Here, NOPAT = Net operating profit…

Q: The Calgary Company is attempting to establish a current assets policy. Fixed assets are Tk.…

A: Fixed assets = Tk. 6,00,000 Debt to assets ratio = 40% Interest rate = 10% Expected return = 10%…

Q: debt and RM30,000 common stock. The before-tax cost of debt is 9% and nmon stock is 14%. If the…

A: WACC = E/D+E * (re) + D/D+E*(rd)*(1-t) where E = equity amount  D = debt amount re = cost of equity…

Q: PLI, Inc. has a Debt to Equity Ratio of 3:1. After tax cost of debt is 5% while cost of equity is…

A: SPLI, Inc. has a Debt to Equity Ratio of 3:1, that is its has 75% of debt and 25 % equity and the…

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.