Financial analysis comparison example video

Debt Ratio Equity Ratio EPS DPS Stock Price 30% 70% 1.55 0.34 22.35 40% 60% 1.67 0.45 24.56 50% 50% 1.72 0.51 25.78 60% 40% 1.78 0.57 27.75 70% 30% 1.84 0.62 26.42   Which capital structure shown in the preceding table is Universal Exports Inc.’s optimal capital structure?   Globex Corp. has a capital structure that consists of 40% debt and 60% equity. The firm’s current beta is 1.10, but management wants to understand Globex Corp.’s market risk without the effect of leverage.    If Globex Corp. has a 25% tax rate, what is its unlevered beta?

Cost of Debt     After-tax cost of debt   4.90%       Cost of Equity   Treasury Bond Rate (risk free rate) 5% Beta 0.48 Risk premium 7%               Years 2014 2015 2016 2017 Capital Structure         Debt 22% 25% 28% 27% Equity 78% 76% 72% 73%             Please calculate following for each of the year from 2014 to 2017:3 1. Cost of Debt (before tax) 2. Cost of Equity 3. WACC (Weighted Average Cost of Capital)

Company Name  Total                 Debt Ratio  Levered     Equity Beta  Marginal Tax Rate  Revenues             ($ Mill)  Priv-Held Automotive      65.00%      ?     40.00%    Ford Motor Company  85.98%  1.07  7.59%  157,978   Fiat Chrysler America  74.29%  2.18  11.95%  108,018   General Motors  81.18%  1.42  3.47%  144,010   1. Calculate the unlevered asset betas for each of the three comparable firms being sure to adjust appropriately for their respective marginal tax rates    2. Calculate the arithmetic industry average of the three asset betas     3. Calculate the weighted average asset beta using the revenues to determine the weights    4. Estimate a levered equity beta for the Privately-Held Automotive division for both the arithmetic and the weighted averages.    5. Write out the algebraic equation of the variance (s2) of a portfolio with three assets, A, B and C.

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Debt equity ratio? General accounting

Accounting question

Problem solve this problem

F1

General accounting solve this question

Question 1. WACC   Cost of Debt     After-tax cost of debt   4.90%       Cost of Equity   Treasury Bond Rate (risk free rate) 5% Beta 0.48 Risk premium 7%               Years 2014 2015 2016 2017 Capital Structure         Debt 22% 25% 28% 27% Equity 78% 75% 72% 73%             Please calculate following for each of the year from 2014 to 2017 Cost of Debt (before tax) Cost of Equity WACC (Weighted Average Cost of Capital)

Financial Accounting Question please solve

Check my work Evans Technology has the following capital structure. Debt Common equity 25% 75 The aftertax cost of debt is 7.00 percent, and the cost of common equity (in the form of retained earnings) is 14.00 percent. a. What is the firm's weighted average cost of capital? (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) Weighted Cost Debt Common equity Weighted average cost of capital 0.00 % An outside consultant has suggested that because debt is cheaper than equity, the firm should switch to a capital structure that is 50 percent debt and 50 percent equity. EGO 152 APA ttv MacBook Air

Xena Corp. Total Assets $21,249 Interest-Bearing Debt (market value) $11,070 Average borrowing rate for debt 10.20% Common Equity:   Book Value $5,535 Market Value $23,247 Marginal Income Tax Rate 19% Market Beta 1.64             Using the information from the table, and assuming that the risk-free rate is 4.5% and the market risk premium is 6.2%, calculate Xena's weighted-average cost of capital:

1. Is leverage better or worse in the period from 2015-2021? Why?

Financial accounting question

Domestic

Calculate the cost of equity with the CAPM Calculate the cost od debt based on what the company is currently paying for its debt - Beta of the industry = 1.16 - Equity Risk Premium = 6.97% - Risk-free rate = 3.77% - Objective capital structure of the industry = 13.24%

Market Value of Equity Market Value of Debt Cost of Equity Cost of Debt Tax Rate Company A $200,000 $150,000 8% 3% 30% Company B $300,000 $200,000 5% 2% 30% ^ Based solely on their current weighted average cost of capital, which company should pursue an investment opportunity with an expected return of 6%?

Assume that Firm A is an all-equity firm with total assets of $1,000 and the following distribution of EBIT for the coming year: Probability EBIT Interest EBT Taxes (40%) Net Income BEP ROA ROE 1.99% 2.79% 3.49% Firm A (Unlevered) 2.32% 2.83% Bad 30% $120 SO $120 $48 $72 12.0% 7.2% Economy Average Now assume As you can calculate, the standard deviation of the ROE distribution is 1.39 percen that the firm plans to issue $300 of debt, at an interest rate of 10 percent, and use the proceeds to repurchase equity (you may ignore potential impacts on price and assume that the firm will then have $700 of equity). Determine the standard deviation of the new ROE distribution if the firm does issue this debt. 40% $150 $0 $150 -$60 $90 Good 30% $180 SO $180 -$72 $108 15.0% 18.0% 9.0% 10.8% 9.0% 10.8%

Q18 If the company’s EBIT is OMR 500,000; market value of the equity is OMR 2,000,000 and value of Debt is OMR 4,000,000; then what is the overall cost of capital of the firm under Net Income Approach? a. 12.5% b. 10% c. 25% d. 8.33%

Evans Technology has the following capital structure. Debt Common equity 30% 70 The aftertax cost of debt is 7.50 percent, and the cost of common equity (in the form of retained earnings) is 14.50 percent. a. What is the firm's weighted average cost of capital? Note: Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places. Debt Common equity Weighted average cost of capital Weighted Cost % 0.00 % Q Search An outside consultant has suggested that because debt is cheaper than equity, the firm should switch to a capital structure that is 50 percent debt and 50 percent equity. Under this new and more debt-oriented arrangement, the aftertax cost of debt is 8.50 percent, and the cost of common equity (in the form of retained earnings) is 16.50 percent. b. Recalculate the firm's weighted average cost of capital. O Che

Canvas C. compute the earnings per share for the three financing packages by completing the table below: Financial Package 3 Operating earnings in million - interest expense in million - Earnings available in million No. of Shares Earnings per share d. complete the table below for each of the three financing packages based on three assumptions for the return on assets shown below; Financial Packages Annual (ROA) 1 least leverage 3 most leverage 15% 10% 5% F1 DII F2 F3 F4 prt sc

Calculate WACC from following data. Risk free rate 1.63% total debt $78.93 billion Market Cap $2580 billion Beta 0.86 Corporate Bond rate 3.10% CAPM S&P historical return 5.90% Tax Rate 21% please show steps