412 TIE RATIO The HR. Pickett Corp. has $500000 of debt outstanding, and it pays an armual intenest rate of 1., Its annual sales are $2 millan, its average tax rate s 30%, and ats net protit margin is 5 What is its TiE ratio?
Q: Klin Company 6 percent interest on its outstanding debt, which equals P100,000. The company’s sales…
A: Solution:- We know, Times interest earned (TIE) = Earnings before interest and tax / Interest…
Q: Diamond Company's cost of debt financing is 10%. Its tax rate is 35%. Diamond has $3,000,000 of…
A: The cost of debt is the interest expense to be paid on the debt. Since interest expenses is tax…
Q: Thrice Corp. uses no debt. The weighted average cost of capital is 9.8 percent. The current market…
A: As there is no debt, WACC = Cost of equity (r) = 9.8% Market value of equity = $18.4 million Tax…
Q: WACC Shi Import-Export's balance sheet shows $300 million in debt, $50 million in preferred stock,…
A: Cost of debt which is considered in the calculations of WACC needs to be Cost of debt after tax.…
Q: Lannister Manufacturing has a target debt-equity ratio of 0.62. Its cost of equity is 18 percent,…
A: Debt-equity ratio is 0.62.The debt can be expressed as:
Q: Company A has a debt to equity ratio of 0.55. The company is considering a new plant that will cost…
A: The question is releted to calculation of weighted Average flotation cost. The details are given.
Q: 16. LSP Manufacturing recently reported Net income of $350,000, Intere expense $112,000. It has ROA…
A: Bartleby honor code states that when various questions are asked, the expert should answer only the…
Q: 37. A company with S60,000 in current assets and $35,000 in current liabilities pays a $1,000…
A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…
Q: Capital structure Buggins Inc. is Önanced equally by debt and equity, each with a market value of…
A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…
Q: Taxes and WACC [LO3] Sixx AM Manufacturing has a target debt-equity ratio of 0.65. Its cost of…
A: WACC formula :- debt* cost of debt *(1-tax %) + equity* cost of equity. Or WACC = D*kd*(1-t%) + E*ke
Q: WACC Shi Import-Export's balance sheet shows $300 million in debt, $50 million in preferred stock,…
A: WACC means weighted average cost of capital of the company. It means combined cost of capital for…
Q: 9. Taxes and WACC Caddie Manufacturing has a target debt-equity ratio of .45. Its cost of equity is…
A: WACC used to represent the cost of capital of the company, where each and every category of 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: 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: 7. LSP Corporation has forecasted sales of $120,000, operating expenses excluding depreciation and…
A: Sales (S) = $120,000 Operating expenses (O) = $40,000 Amortization and depreciation (D) = $20,000…
Q: 15. Vodacom SA has a dividend payout ratio of 70%. The personal tax rate on dividend income is 20 %,…
A: Personal tax on equity income means the tax charged on the income that is equity in nature. The…
Q: 20. Lina's Corp's sales last year were $852,500, its operating costs were $543,750, and its interest…
A: Sales = $852,500 Operating expenses = $543,750 Interest charges = $18,750
Q: 89. Delta Mowers has a debt-equity ratio of 1.2. Its WACC is 10.1 percent, and its cost of debt is…
A: Given : WACC=10.1%Cost of debt (kd)=7.5% DebtEquity=12 Which means : Weight of debt (wd)=13Weight of…
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: 14. PRENTICE A LEARNER Co. reported profit after tax of ₱210,000. PRENTICE’s income tax rate is 30%.…
A: Net income after taxes is indeed a monetary term used to depict an organization's benefit after all…
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: 16. LSP Manufacturing recently reported Net income of $350,000, Interest expense $112,000. It has…
A: Net income = $350,000 Interest expenses = $112,000 ROA = 9% Assets = Net income/ROA =…
Q: 7. LSP Corporation has forecasted sales of $100,000, operating expenses excluding depreciation and…
A: Bartleby honor code states that when various questions are asked, the expert should answer only the…
Q: 7. If net sales amounted to P200,000, net income before tax is P80,000 and the income tax rate is…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: nt Average: /2 1.13 (TIE and ROIC Ratios) eBook Corp. has $200,000 of interest-bearing debt…
A: ROIC is return on capital employed can be found out by net income and total capital employed. Time…
Q: 6. Atlas Co sales last year were $4,350, its operating costs were $3,625, and its interest charges…
A: earnings before interest and tax = (sales - operating cost)
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: Problem 2. Last year Jullan Corp. had sales of P303,225, operating costs of P267,500, and year- end…
A: The return on equity(ROE) ratio provides insight to an investor about how efficiently the company is…
Q: 20. Taxes and the Cost of Capital. Here is Icknield s market-value balance sheet (figures in $…
A: The weighted average cost of capital is the average rate of return that a company gives to all its…
Q: 3. Orange Company recently reported $10,500 of sales, $4,000 of operating costs other than…
A: As per Bartleby Honor Code, when multiple questions are asked, the expert is required only to solve…
Q: WACC The Patrick Company’s year-end balance sheet is shown below. Its cost of common equity is 16%,…
A: Given information: Cost of equity : 16% Cost of debt (Before tax) : 13% Tax : 40% Value of debt :…
Q: What would be a company's "timesInterest earned ratio if interest paid on loans amount to P9.000 and…
A: Times Interest Earned Ratio=Net Income before interest and taxInterest Expense
Q: 1. Sexy Inc. has P5 million in current assets, P3 million in current liabilities, and its initial…
A: The current ratio is a liquidity ratio that assesses a company's ability to pay short-term or…
Q: еВook The Paulson Company's year-end balance sheet is shown below. Its cost of common equity is 18%,…
A: Weighted average cost of capital WACC gives the firms combined cost of capital, including the…
Q: Times-Interest-Earned Ratio The Morrit Corporation has $480,000 of debt outstanding, and it pays an…
A: Ratio analysis is defined as an quantitative method for gaining an insight into the liquidity of the…
Q: 19. Lina's Corp's sales last year were $652,500, its operating costs were $543,750, and its interest…
A: In the above question we need to calculate the TIE ratio i.e. Time interest earned ratio for Lina…
Q: 18.. The Huck Printing Co. had sales of $10 million, Operating Income of $3 million; After tax…
A: Net income after tax = $1 million Total assets = $8 million
Q: WACC The Paulson Company's year-enu balance sheet is shown below. Its cost of com- mon equity is…
A: Given information: Total number of shares 576 Price per share is $4 Market value of debt is $1,167…
Q: tanding in Company Z is $850,000 at 7.5%. Annual sales of the Company are $5,500,000. Net profit…
A: Times Interest Earnings Ratio is the times profit is earned to cover the interest.
Q: hoose the correct letter of answer: The following data applies to a firm: Interest Charges P10…
A: Ratio analysis means where different ratio of various years of years companies has been compared and…
Q: 93. Marcos & Sons has no debt. Its current total value is $58 million. What will the company's value…
A: Current Total Value = 58,000,000 Issued Debt to repurchase equity Tax Rate = 34% Issued Debt =…
Q: 2-13 Wiley's Wilderness pays 6 percent interest on its outstanding debt, which equals $200,000. The…
A: The times interest earned ratio is used to measure the firm's ability to honor its debt obligations.…
Q: Binomlal Tree Farm's financing Includes $7.1 milion of bank loans. Its common equity Is shown In…
A: Debt is the amount of money or funds that are owed by a corporation to another party and is to be…
Q: Cha Cha Corporation has three long term loans (interest bearing debt): a loan of $100,000 at 6%…
A: Given, interest bearing debt: 6% loan of $100,000 8% loan of $100,000 14% loan of $100,000 Equity of…
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- Bishop Co has previously calculated figures as follows:Ke = 18.5%, market value of 1 ordinary share = $2.50Kp = 5.4%, market value of one preference share = $1.95Kd(1–t)’ (irredeemable debt) = 7%, market value per $100 nominalvalue =$105Kd(1–t)’ (redeemable debt) = 6.9%, market value per $100 nominalvalue =$93.96Kd(1–t)’ (non tradable debt) = 5.4%, book value $2m.Kp = 6%, market value of one preference share(non-cummulative)= $1.70In addition the following information is relevant:Ordinary shares in issue 3.8 millionPreference shares in issue 2.5 millionPreference shares (non-cummulative) in issue 1 millionNominal value in issue of irredeemable loan notes = $6 millionNominal value of redeemable loan notes in issue = $0.8 million.Required:-Calculate the current WACC by market values.The Gar~ngton O>rporation expects next year's net income to be $ 15 mHo~on. The Grm's debt/as sets ratio cu rrently is 40 perce nt Garlington has$12 mH~on of proGtable invesbnent opportuniti es. and it wishes to maintainexisting debt ratio. According to the residual di,;dend policy. how largeshould Garlington 's dividend pa)'OUtratio be next )"'arAustin's Cookies has a return on assets of 7.8 percent and a cost of equity of 11.9 percent. What is the pretax cost of debt if the debt–equity ratio is .72? Ignore taxes. Format as a percentage, round to two places past the decimal point, and format as "X.XX"
- Given:Avarege trade receivables of afirm is40.000,average finished goodsis 50.000, cost of goods sold is 200000 and net sales is 250.000. Whatis trade receivables turnover? a. 250.000/40.000b. 40.000/ 200.000c. 40.000/250.000d. 200.000/ 40.000==========5. Activity Ratios are used in the assessment ofa) The financial risk of the companyb) the profitability of the assetsc) the short term debt repayment capacity of the firmd)the efficiency of the asset or the source analyzedDelta GMBH’s ROE is 8.9 percent. Sales are $2,956,000.00. Total debt ratio is 0.3743. Total debt is $964,000.00. Determine the return on assets (ROA).Given:Avarege trade receivables of afirm is40.000,average finished goodsis 50.000, cost of goods sold is 200000 and net sales is 250.000. Whatis trade receivables turnover? a. 250.000/40.000 b. 40.000/ 200.000 c. 40.000/250.000 d. 200.000/ 40.000 ========== 5. Activity Ratios are used in the assessment ofa) The financial risk of the companyb) the profitability of the assetsc) the short term debt repayment capacity of the firm d)the efficiency of the asset or the source analyzed
- Sixx AM Manufacturing has a target debt—equity ratio of 1.6. Its cost of equity is 0.11, and its pretax cost of debt is 0.05. If the tax rate is 0.36, what is the company's WACC? Enter the answer with 4 decimals (e.g. 0.0123)Fama's Llamas has a WACC of 8.8 percent. The company's cost of equity is 12 percent, and its pretax cost of debt is 6.8 percent. The tax rate is 22 percent. What is the company's target debt - equity ratio? Note: Do not round intermediate calculations and round your answer to 4 decimal places, e.g .. 32.1616.Q29 If the company’s Interest on Debt is OMR 50,000 with 10% interest rate, the market value of Equity is OMR 800,000; then what is the Total Value of the firm under Net Operating Income Approach? a. OMR 2,000,000 b. OMR 500,000 c. OMR 1,300,000 d. OMR 800,000
- Jack Corp. has a profit margin of 3.0 percent, total asset turnover of 2.3, and ROE of 17.45 percent. What is this firm’s debt-equity ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)Q40 If the company’s Earnings before interest and taxes (EBIT) is OMR 500,000, the weighted average cost of capital is 12.5%, and the market value of the equity is OMR 1,000,000; then what is the value of Debt under Net Operating Income Approach? a. OMR 4,000,000 b. OMR 6,000,000 c. OMR 3,000,000 d. OMR 5,000,000A firm has total debt of $1,400 and a debt–equity ratio of .25. What is the value of the total assets? which multiple choice question is the right amswer. Multiple Choice $7,000.00 $2,500.00 $1,750.00 $3,500.00 $5,600.00
