The financial breakeven point of Soillnc. is P90,000,while the tax rate applicable to the company is 30%.The company pays 10% interest on the P200,000 outstanding loan. How much is the total preferred dividends distributed?|
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- Brower Co. is considering the following alternative financing plans: Income tax is estimated at 40% of income. Determine the earnings per share of common stock, assuming that income before bond interest and income tax is 2,000,000.The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are expected to be 75% of sales, and depreciation is expected to be 1.5 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Berndts federal-plus-state tax rate is 40%. Berndt has no debt. a. Set up an income statement. What is Berndts expected net income? Its expected net cash flow? b. Suppose Congress changed the tax laws so that Berndts depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? c. Now suppose that Congress changed the tax laws such that, instead of doubling Berndts depreciation, it was reduced by 50%. How would profit and net cash flow be affected? d. If this were your company, would you prefer Congress to cause your depreciation expense to be doubled or halved? Why?The financial breakeven point of Soil Inc. is P90,000, while the tax rate applicable to the company is 30%. The company pays 10% interest on the P200,000 outstanding loan. How much is the total preferred dividends distributed?
- The tax rate applicable to Ivan Co. is 20%. The firm pays 5% interest on the P350,000 outstanding loan and the total preferred dividends to be distributed is P16,500. What is the Financial Breakeven point?National Co. has a financial break-even point at P260,000. Th company paid an annual interest of P80,000 and has an applicable corporate tax rate of 45%. How much is annual preferred dividends paid by National Co.?Vhea Corp has an operating profit of P1,200 produced from P9,800 insales. If Vhea has no interest expense and currently pays 35% of itsoperating profits in taxes and P200 per year in preferred dividends, thenwhat is Vhea’s net profit margin? A. 10.20%B. 7.96%C. 7.96%D. 5.92%
- Kelly Corporation is considering the issuance of either debt or preferred stock to finance the purchase of a facility costing P1.5 million. The interest rate on the debt is 16 percent. Preferred stock has a dividend rate of 12 percent. The tax rate is 46 percent. REQUIREMENTS: 1. What is the annual interest payment? 2. What is the annual dividend payment? 3. What is the required income before interest and taxes to satisfy the dividend requirement??GS Co. has a financial break-even point at P260,000. Th company paid an annual interest of P80,000 and has an applicable corporate tax rate of 45%. How much is annual preferred dividends paid by GS Co.If for the most recent year, a firm's RNOA is 17.5%, its sales were $2,000,000, its asset turnover is 2.0, its operating liability (OL) balance is $250,000, and its short-term borrowing rate (STBC) is 2.5% after tax, what is its ROOA?
- Linkcomn expects an Eamnings after Taxes of 7500005 every year. The firm currently has 100% Equity and cost of raising equity is 12%. If the company can borrow debt with an interest of 10% What will be the value of the company if the company takes on a debt equal to 60% of its unlevered value? What will be the value of the company if the company takes on a debt equal to 50% of its levered value? Assume the company's tax rate is 30% (Must show the steps of calculation)If Average assets and capital are 900,000 and 540,000, respectively, with an ROE of 0.046, how much is the net income before tax of the company? Assume 20% corporate tax. All the options have equal benefits. No peso sign, with comma, two decimal points.Connor Corp. has an EBIT of $970,000 per year that is expected to continue in perpetuity. The unlevered cost of equity for the company is 12 percent, and the corporate tax rate is 21 percent. The company also has a perpetual bond issue outstanding with a market value of $1.91 million. What is the value of the company? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole dollar, e.g., 1,234,567.)