Need answer please andBaker Industries' net income is $25,000, itsinterest expense is $5,000, and its tax rateis 45%. Its notes payable equals $25,000,long-term debt equals $70,000,common equity equals $245,000. The firmfinances with only debt and common equity,so it has no preferred stock. What are thefirm's ROE and ROIC? Round your answers totwo decimal places. Do not roundintermediate calculations.

Step 1:1. Return on Equity (ROE) ROE Formula:[ROE=Common EquityNet Income] Net Income =…

Answered: and Baker Industries' net income is…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 8P

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Ladders, Inc. has a net profit margin of 5.2% on sales of $50.6 million. It has book value of equity of $38.1 million and total book liabilities of $30.9 million. What is Ladders' ROE? ROA? Note: Assume the value of Interest Expense is equal to zero. What is Ladders' ROE? Ladders' ROE is enter your response here %. (Round to two decimal places.) Part 2 What is Ladders' ROA? Ladders' ROA is enter your response here %. (Round to two decimal places.)
A firm has an ROE of 2%, a debt/equity ratio of 0.4, and a tax rate of 40%, and pays an interest rate of 7% on its debt. What is its operating ROA? (Do not round intermediate calculations. Round your answer to 2 decimal places.).
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Enter answer to 2 decimal places.
A firm has an ROE of 4%, a debt/equity ratio of 0.4, a tax rate of 35%, and pays an interest rate of 5% on its debt. What is its operating ROA? (Do not round intermediate calculations.Round your answer to 2 decimal places.) ROA %
Given that the firm has a value of $1,196,428.57 when it is all equity, what will be the value of the firm if Ice Cream Sandwich Co. borrows $160,000 of permanent debt and uses the proceeds to buy back stock? Enter your answer rounded to two decimal places.
The Blooming Flower Co. has earnings of $1.63 per share. a. If the benchmark PE for the company is 22, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. If the benchmark PE for the company is 25, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Stock price b. Stock price
Hornberger, Inc. recently paid a dividend of $2.00 per share. The next dividend is expected to be $2.05 per share. Hornberger has a return on equity of 11.20%. What percentage of its earnings does Hornberger plow back into the firm? (Round your answer to 2 decimal places.) Plowback ratio %
Answer the following questions based on the information in the table. Assume a tax rate of 30 percent. For simplicity, assume that the companies have no other liabilities other than the debt shown. (All dollars are in millions.) Earnings before interest and taxes Debt (at 7% interest) Equity a. Calculate each company's ROE, ROA, and ROIC. Note: Round your answers to 1 decimal place. × Answer is not complete. Atlantic Corporation Pacific Corporation ROE 35.3% % ROA ROIC % % % % Atlantic Pacific Corporation Corporation $ 530 $ 530 $ 310 $ 1,630 $ 1,050 $ 370
Maroon Industries has a debt-equity ratio of 1.4. Its WACC is 14 percent, and its cost of debt is 9 percent. There is no corporate tax. a. What is the company's cost of equity capital? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b-1. What would the cost of equity be if the debt-equity ratio were 2? Note: Do not round intermediate calculations and enter your answer as a percent rounded to the nearest whole number, e.g., 32. b-2. What would the cost of equity be if the debt-equity ratio were .4? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b-3. What would the cost of equity be if the debt-equity ratio were zero? Note: Do not round intermediate calculations and enter your answer as a percent rounded to the nearest whole number, e.g., 32. X Answer is complete but not entirely correct. a. Cost of equity b-1. Cost of equity b-2. Cost of…
A firm has a profit margin of 5.5% and an equity multiplier of 3.0. Its sales are $140 million, and it has total assets of $84 million. What is its ROE? Do not round intermediate calculations. Round your answer to two decimal places.

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