b-1 What is the EBIT/TA rate when the firm's have equal EPS? EBIT/TA rate b-2. What is the cost of debt? Cost of debt % b-3. State the relationship between earnings per share and the level of EBIT EPS is unaffected by financial leverage when the pre-tax return on assets (EBIT/TA) Break-even level the cost of debt c. If the cost of debt went up to 12 percent and all other factors remained equal, what would be the break-even level for EBIT?

Lenow Drug Stores and Hall Pharmaceuticals are competitors in the discount drug chain store business. The separate capital structures for Lenow and Hall are presented here. Lenow   Hall Debt @ 8% $ 210,000   Debt @ 8% $ 420,000 Common stock, $10 par   420,000   Common stock, $10 par   210,000 Total $ 630,000   Total $ 630,000 Common shares   42,000   Common shares   21,000     a. Complete the following table given earnings before interest and taxes of $25,000, $50,400, and $66,000. Assume the tax rate is 10 percent. (Negative amounts should be indicated by parentheses or a minus sign. Round your answers to 2 decimal places.)         What is the relationship between EBIT Total Assets EBIT/TA % Lenow EPS Hall EPS the EPS of the two firms? $25,000 $630,000   %       $50,400 $630,000   %       $66,000 $630,000   %       b-1. What is the EBIT/TA rate when the firm's have equal EPS?   b-2. What is the cost of debt?   b-3. State the relationship…

Assume the following data for Cable Corporation and Multi-Media Incorporated Net income Sales Total assets Total debt Stockholders' equity Cable Corporation Cable Corporation Multi-Media, Incorporated $ 31,200 317,000 402,000 163,000 239,000 a. 1. Compute return on stockholders' equity for both firms. Note: Input your answers as a percent rounded to 2 decimal places. Return on Stockholders' Equity do do % $ % Multi-Media Incorporated $ 140,000 2,700,000 965,000 542,000 423,000

You have the following information about Trisha Company: total asset =P350,000; common stock equity = P175,000; Return on Equity (ROE) =12.5%. What is Trisha’s earnings available for common stockholders? A. P21,875B. P43,750C. P50,000D. P47,632

Suppose the following information is available for Callaway Golf Company for the years 2022 and 2021. (Dollars are in thousands, except share information.) Net sales Net income (loss) Total assets Share information Preferred dividends 2022 Shares outstanding at year-end 67,000,000 2022: $ $1,127,000 2021: 81,486 $ 855,338 0 2021 $1,134,600 66,447 There were 75,640,000 shares outstanding at the end of 2020. (a) 838,078 68,810,000 What was the company's earnings per share for each year? (Round answers to 2 decimal places, e.g. 15.25.) 0

Suppose the following information is available for Callaway Golf Company for the years 2022 and 2021. (Dollars are in thousands, except share information.)     2022   2021 Net sales   $  1,128,000   $  1,135,100 Net income (loss)   86,156   69,048 Total assets   855,338   838,078           Share information         Shares outstanding at year-end   71,500,000   73,300,000 Preferred dividends   0   0 There were 80,140,000 shares outstanding at the end of 2020.(a)What was the company’s earnings per share for each year? (Round answers to 2 decimal places, e.g. 15.25.) 2022 :   $ enter the company’s earnings per share for 2017 in dollars rounded to 2 decimal places 2021 :   $ enter the company’s earnings per share for 2016 in dollars rounded to 2 decimal places

Suppose the following information is available for Callaway Golf Company for the years 2022 and 2021. (Dollars are in thousands, except share information.) 2022 2021 Net sales $ 1,130,000 $ 1,136,600 Net income (loss) 87,474 69,498 Total assets 855,338 838,078 Share information Shares outstanding at year-end 72,000,000 73,790,000 Preferred dividends There were 80,650,000 shares outstanding at the end of 2020. (a) What was the company's earnings per share for each year? (Round answers to 2 decimal places, e.g. 15.25.) 2022: 2$ 2021:

Here is a simplified balance sheet for Locust Farming:   Locust Farming Balance Sheet ($ in millions) Current assets $ 42,524   Current liabilities $ 29,755   Long-term assets   46,832   Long-term debt   27,752           Other liabilities   14,317           Equity   17,532   Total $ 89,356   Total $ 89,356       Locust has 657 million shares outstanding with a market price of $83 a share. c. How much value as the company created for its shareholders as a percent of shareholders’ equity, that is, the net capital contributed to the firm by its shareholders? (Enter your answer as a percentage rounded to the nearest whole number.)

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Consider the table shown below to answer the question posed in part a. Parts b and c are independent of the given table. Number of Share Market Capitalization ($ millions) 1547.66 (millions) Stock Price = Callaway Golf (ELY) Alaska Air Group (ALK) Yum! Brands (YUM) Caterpillar Tractor (CAT) Microsoft (MSFT) $ 16.36 $ 61.96 $ 85.13 $597.63 $ 91.27 94.6 123.4 7645.86 $ 28,305.73 $ 88,090.66 332.5 147.4 7,705.0 $703,235.35 a. The price of Yum! Brands stock has risen to $185. What is the market value of the firm's equity if the number of outstanding sha does not change? (Enter your answer in billions rounded to 3 decimal places.) O Answer is complete but not entirely correct. Market value $33,114.270 8 b. The rating agency has revised Catalytic Concepts' bond rating to BBB (use Table 2.2). What interest rate, approximately, would the company now need to pay on its bonds? (Enter your answer as a percent rounded to 1 decimal place.) Interest rate Ac Graw Hill 1 of 8 Prev Next > MacBook Air…