A company has operating income of Rs. 5,00,000. The firms cost of debt is 10% and firm employs Rs. 15,00,000 of debt. The overall cost of capital of the firm is 15%. What is total value of the firm. & Cost of equity as per MM Theory ( Assuming no taxes)

Q: Portneuf Industries has a debt-equity ratio of 1.5. Its WACC is 8.4%, and its cost of debt is 5.9%.…

A: We are given the following data :Debt-equity ratio : 1.5WACC : 8.4%Cost of debt : 5.9%Tax rate :…

Q: Calculate the Altman Z-score of a firm who has the following financials: • Working capital = $1,000…

A: In this question, we are required to determine the Altman Z-Score.

Q: Oblib Inc. has a debt-equity ratio of 2, and a weighted average flotation cost of 4%. What is the…

A: Amount to be raised=$1.5 millionWeighted average flotation cost=4%

Q: You own a business with Assets on the books valued at $200,000. These assets were financed with Debt…

A: The Weighted Average Cost of Capital (WACC): The weighted average cost of capital considers all the…

Q: Find the WACC given the following information: A firm has a cost of equity of 8% and cost of debt of…

A: Weighted average cost of capital generally referred to by its abbreviation 'WACC' is the average…

Q: A company's capital structure consists of 25% debt and 75% common equity. The company has a 20% tax…

A: Certainly! Let's break down the calculation of WACC in a step-by-step mathematical way for both…

Q: The Net Income of a company is $137. Capital expenditures for the year was $98, depreciation was…

A:

Q: A firm has a long-term debt–equity ratio of 0.50. Shareholders’ equity is $2.0 million. Current…

A: Debt equity ratio- 0.50 Equity - $2.0 million CA- $ 320,000 Total assets - $3,200,000 Current ratio…

Q: ABC company has a capital structure of $7.1 million and it is made up of $5.6 million in equity and…

A: WACC considers all the sources of finance with their respective weights

Q: Consider a firm that has 15% of debt. The rate of return for debt is 6% and the rate of return for…

A: Weight of debt of firm(Wd) =15%

Q: Your firm has net income of $315 on total sales of $1,260. Costs are $700 and depreciation is $110.…

A: Net income = $315 Depreciation = $110

Q: A firm has a net income of 10 million and a debt ratio of 60%. Its sales are 200 million and it has…

A: Formulas to be used where ROE = Return on equity   Equity ratio = 1 - debt ratio

Q: A business has a cost of equity of 9.5 percent and a pretax cost of debt of 5.4 percent. The…

A: The unlevered cost of capital is the rate of return which a company expects to earn on its assets…

Q: A company has determined that its optimal capital structure consists of 34 percent debt and the rest…

A: WACC stands for Weighted Average Cost of Capital. It represents the average rate of return a company…

Q: 1. Precious Metal Mining has $4 million in sales, its ROE is 13%, and its total assets turnover is…

A: Since you have posted multiple questions, we will provide the solution only for the first question…

Q: Intro Munding Corp. has debt with a market value of $23 million and equity with a market value of…

A: Weighted Average Cost Capital means the cost which was borne by the company  in overall terms for…

Q: A firm has a cost of debt of 6.5 percent and a cost of equity of 10.1 percent. The debt–equity ratio…

A: Solution:Weighted Average Cost of Capital (WACC) means the average cost of capital for the firm…

Q: Using WACC, ignoring taxes, compute the cost of capital of a company with debt ratio of 0.75:1 and…

A: Debt ratio = 0.75 Equity ratio = 1-0.75 = 0.25 Debt cost = 4% Equity cost = 5%

Q: PT XYZ is a garment company that produces batik and other traditional clothing. The company's…

A: Weighted average cost of capital shows a company average cost of capital from all the sources that…

Q: Calculation of individual costs and WACC Dillon Labs has asked its financial manager to measure the…

A: A company's average after-tax cost of capital from all sources, including common stock, preferred…

Q: DTO, Inc., has sales of ₱15 000 000, total assets of ₱12.6 million, and total debt of ₱ 5.6 million.…

A: Sales = 15000000 Total assets = 1260000 Total debt = 560000 Equity = Assets - debts  = 1260000 -…

Q: ager each specific type of capital as well as the weighted average cost is to be measured by using…

A: WACC is the expected rate that the company is expecting to pay to the sources of finance. In this,…

Q: give me answer

A: Step 1:Determine the formula for the weighted average cost of capital (WACC):WACC = (E/V) * Re +…

Q: A firm has a cost of debt of 6.2 percent and a cost of equity of 13.3 percent. The debt–equity ratio…

A: Cost of debt = 6.2% Cost of equity = 13.3% Debt-equity ratio = 0.96 Debt-asset ratio = Debt equity…

Q: ive typing answer with explanation and conclusion    Fama's Llamas has a weighted average cost of…

A: Weighted average cost of capital is total cost of financing the capital of the company. It includes…

Financial Ratios

A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.

Return on Equity

The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.