ESS Company's current liabilities are P50,000, its long-term liabilities are P150,000, and its working capital is P80,000. If ESS Company's debt-to equity ratio is 032, Its total long- term assets must equal: A P625,000 8. B. P745,000 C P825,000 D. P695,000
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- Assume Skyler Industries has debt of $4,500,000 with a cost of capital of 7.5% and equity of $5,500,000 with a cost of capital of 10.5%. What is Skylers weighted average cost of capital?Nelson Company's current liabilities are P50,000, its long-term liabilities are P150,000, and its working capital is P80,000. If Nelson Company's debt-to-equity ratio is 0.32, its total long-term assets must equal O P625,000 O P825,000 O P745,000 O P695.000 Hydro Cable wishes to calculate their return on assets (ROA). You know that the return on equity (ROE) is 12% and that the debt ratio is 40%. What is the ROA? 0 4.8% O 20% 0 7.2% O 12% Tech Manufacturing Company realized P15,000,000 in sales, with a cost of goods sold of P6,000,000, gross profit margin of 45% of net sales, operating expenses of P4,500,000, tax rate of 35%, and average total assets of P6,500,000. What is Tech's Return on Assets (ROA)? O 42.5% O 50% O 45% O 47.75%Q40 If the company’s Earnings before interest and taxes (EBIT) is OMR 500,000, the weighted average cost of capital is 12.5%, and the market value of the equity is OMR 1,000,000; then what is the value of Debt under Net Operating Income Approach? a. OMR 4,000,000 b. OMR 6,000,000 c. OMR 3,000,000 d. OMR 5,000,000
- Consider the following data for the firms Acme and Apex: Equity ($ million) Debt ($ million) ROC Cost of Capital Acme 290 145 17% 9% Apex 1,450 483 15% 10% a. Calculate the economic value added for Acme and Apex (round to 2 decimal places). Economic value added for Acme $? million Economic value added for Apex $? million b. Calculate the economic value added per dollar of invested capital for Acme and Apex (round to 2 decimal places)? Economic value added for Acme per dollar Economic value added for Apex per dollarBombay Company's book and market value balance sheets are as follows: (NWC = net working capital; LTA = long term assets; D = debt; E = equity; V = firm value): Book Values Market Values NWC 200 500 D NWC 200 500 D LTA 2,300 2,00 E LTA 2,800 2,500 E 2,500 2,500 V 3,000 3,000 V According to MM's Proposition I corrected for taxes, what will be the change in company value if Bombay issues $200 of equity and uses it to make a permanent reduction in the company's debt? Assume a 21 percent marginal corporate tax rate. Multiple Choice A) +$70 B) −$42 C) $0 D) +$140 Please show your workFama’s Llamas has a weighted average cost of capital of 8.4 percent. The company’s cost of equity is 11 percent, and its pretax cost of debt is 5.8 percent. The tax rate is 25 percent. What is the company’s target debt-equity ratio? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.)
- Luxembourg Port Co. has assets of €100 million (including €10 million in cash) and debt of €20 million. If the company borrows an additional €10 million to repurchases €20 million of stock, what is the new debt-to-equity ratio?Pacific Filght PLC has in issue K500,000 10% irredeemable debentures. Investors currently require 8% return per annum. What will be the market value of the debt?A company has debt, equity share and overdraft financing. The overdraft is used to finance the day-to-day activities of the company when necessary. The after-tax cost of debt is 12%, the cost of equity is 20% and the after-tax cost of the overdraft is 18%. The market value of debt is R1 000 000, the market value of equity is R2 000 000 and the market value of the overdraft is R500 000. Calculate the company’s weighted average cost of capital (rounded to two decimal places). a. 18.33% b. 17.33% c. 18.43% d. 19.33% e. 17.43%
- 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 800,000Alpha Corporation has average annual free cashflows to the equity holder and to the firmof P3,000,000 and P3,350,000 respectively. Assuming that the weighted average cost ofcapital and actual return of on assets is 16.75% while the market return on Alpha's debt is7%, what is the value of its equity? a. P34,358,974.36 b.P15,000,000.00 c.P17,910,447.76 d.P20,000,000.00Assume the following data for U&P Company: Debt (D) = $100 million; Equity (E) = $300 million; rD = 6%; rE = 12%; and TC = 30%. Calculate the after-tax weighted average cost of capital (WACC): Multiple Choice A) 10.5% B) 10.05% C) 15% D) 9.45%
