Rain company whose tax rate is 40% has a total asset of P500,000,000 and earnings before interest and taxes of P200,000,000. The company’s target capital structure is 50% debt funded and 50% equity funded. The cost of new and old debt is constant at 8%. Retention ratio is 40%. 1. Determine the interest payment of Rain Company. 2. How much is the net income?
Rain company whose tax rate is 40% has a total asset of P500,000,000 and earnings before interest and taxes of P200,000,000. The company’s target capital structure is 50% debt funded and 50% equity funded. The cost of new and old debt is constant at 8%. Retention ratio is 40%. 1. Determine the interest payment of Rain Company. 2. How much is the net income?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter6: Accounting For Financial Management
Section: Chapter Questions
Problem 10P: The Moore Corporation has operating income (EBIT) of 750,000. The companys depreciation expense is...
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Rain company whose tax rate is 40% has a total asset of P500,000,000 and earnings before interest and taxes of P200,000,000. The company’s target capital structure is 50% debt funded and 50% equity funded. The cost of new and old debt is constant at 8%. Retention ratio is 40%.
1. Determine the interest payment of Rain Company.
2. How much is the net income?
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