Aurora Enterprises has the following financial data: Net income: $40,000 Interest expense: $8,000 Tax rate: 40% Notes payable: $30,000 Long-term debt: $90,000 Common equity: $300,000 the firm finances with only debt and common equity, so it has no preferred stock. Calculate the firm's Return on Equity (ROE) and Return on Invested Capital (ROIC). Round your answers to two decimal places.
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- Help meFollowing is the financial statements data for XYZ Corporation: XYZ Corp. Total Assets $23,565 Interest-Bearing Debt $12,131 Average borrowing rate for debt Common Equity: 11.7% Market Value $26,887 Marginal Income Tax Rate 35% Market Beta 1.91 Based on the information above, what is the weight on equity capital that you can use to calculate the firm's weighted-average cost of capital (WACC) (Write your answer in percent, omit the "%" sign, and round your answer to two decimal places. For example, if your answer is 0.538, type in 53.80):Would like to see excel and formulas to follow how the numbers were derived.
- What are the firm's ROE and ROIC on these financial accounting question?Need answer pleaseYou are given the financial information for the Unic Company: Earnings Before Interest and Tax (EBIT) = $126.58 Corporate tax rate (TC) = 0.21 Debt (D) = $500 Unlevered cost of capital (RU) = 0.20 The cost of debt capital is 10 percent. Question: Determine the value of Unic Company equity? Determine the cost of equity capital for Unic Company? Determine the WACC for Unic Company?
- Use the following scenario to solve A-C. H2X Incorporated has accounts payable of $400,000 (a typical amount for the company, non-interest bearing), a bank loan of $700,000 at 9% interest rate, a bank loan of $1,000,000 at 6.5% interest rate, and equity of $2,800,000. Its income tax rate is 32%. Management estimates the company’s cost of equity is 14%. A. What is the company’s weighted average cost of capital on non-interest-bearing debt, interest bearing debt, and equity (or total invest capital)? a. 11% b. 10% c. 9% d. 12% B. Company managers are considering selling more stock to raise $500,000 of new equity to purchase $500,000 of new manufacturing equipment. What would the new weighted average cost of capital be if this plan were implemented? a. 10% b. 12% c. 9% d. 11% C. Company managers are projecting that the new manufacturing equipment from question 15 will produce a return on assets of 11%. Should the company proceed with this plan? a. No, because…You have completed a first pass of a pro-forma balance sheet for Farmer Company. This reveals external financing need of $12 million. The pro-forma income statement shows a Net Income of $100 million and traditionally the firm has paid 40% of its earnings in the form of dividends (which is currently reflected in your pro-forma financials). What payout ratio would eliminate the external financing need of the firm?Grey Wolf, Inc., has current assets of $2,090, net fixed assets of $9,830, current liabilities of $1,710, and long-term debt of $4,520. a. What is the value of the shareholders’ equity account for this firm? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. How much is net working capital? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
- I want to answerYou've collected the following information about Caccamisse, Incorporated: Sales Net income Dividends Total debt Total equity = a. Sustainable growth rate b. Additional borrowing c. Growth rate = = = = $ 330,000 $ 18,700 $ 7,500 $ 70,000 $ 101,000 a. What is the sustainable growth rate for the company? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. Assuming it grows at this rate, how much new borrowing will take place in the coming year, assuming a constant debt-equity ratio? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. What growth rate could be supported with no outside financing at all? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. % %The calculation of WACC involves calculating the weighted average of the required rates of return on debt, preferred stock, and common equity, where the weights equal the percentage of each type of financing in the firm’s overall capital structure. Q1. ________is the symbol that represents the cost of preferred stock in the weighted average cost of capital (WACC) equation. Q2. Avery Co. has $3.9 million of debt, $2 million of preferred stock, and $2.2 million of common equity. What would be its weight on debt? a. 0.27 b. 0.25 c. 0.48 d. 0.20 Q1. Option 1 rS or Option 2 rD or Option 3 rP or Option 4 rE Please provide the correct answers. Thank you!