Baker Industries' net income is $24,000, its interest expense is $4,000, and its tax rate is 25%. Its notes payable equals $23,000, long-term debt equals $70,000, and common equity equals $250,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm's ROE and ROIC? Do not round intermediate calculations. Round your answers to two decimal places. ROE: ROIC: % %
Q: Denver, Incorporated, has sales of $24 million, total assets of $21.6 million, and total debt of…
A: Solution:- Net income means the net profit earned by a firm on its sales. So, net income = Sales x…
Q: BI's net income is $24,000, its interest expense is $5,000, and its tax rate is 40%. Its notes…
A: The question is to calculate ROE (Return on Equity) and ROIC (return on Invested Capital) by use…
Q: Vigo Vacations has $300 million in total assets, $7 million in notes payable, and $35 million in…
A: Debt ratio: The debt ratio measures the proportion of the asset paid for with debt. It is calculated…
Q: In 2018, Beta Corporation earned gross profits of $720,000. a. Suppose that Beta was financed by a…
A: Calculation of net profits:Excel spreadsheet:
Q: Aquilera, Inc., has sales of $18.8 million, total assets of $13.8 million, and total debt of $4.6…
A: Net income means the amount the company is earning its profits ie. Revenues – total costs.Also, Net…
Q: The Nelson Company has $1,365,000 in current assets and $525,000 in current liabilities. Its initial…
A: Let change in CA and CL be X Current ratio = Current assets / Current liabilities New Current…
Q: Baker Industries’ net income is $24000, its interest expense is $4000, and its tax rate is 40%. Its…
A: ROE( Return on Equity) and ROIC( Return on Invested Capital) are fiscal performance criteria that…
Q: Denver, Incorporated, has sales of $14.2 million, total assets of $11.3 million, and total debt of…
A: Shareholder equity helps investors and other companies in analyzing the growth or financial position…
Q: Williamson, Inc., has a debt-equity ratio of 2.45. The company's weighted average cost of capital is…
A: Here,Debt Equity ratio is 2.45Cost of Debt is 6%Tax Rate is 25%WACC is 10%
Q: The Nelson Company has $1,352,000 in current assets and $520,000 in current liabilities. Its initial…
A: Current ratio is measured by dividing the current assets of the company by the current liabilities…
Q: The Nelson Company has $1,228,500 in current assets and $455,000 in current liabilities. Its initial…
A: Current ratio is the liquidity ratio that is calculated by dividing current assets by current…
Q: Henderson's Hardware has an ROA of 11%, a 7% profit margin, and an ROE of 18%. A). What is its…
A: Total assets turnover Return on assets = Net profit / Assets turnover So, Assets turnover = Return…
Q: Needham Pharmaceuticals has a profit margin of 3% and an equity multiplier of 1.7. Its sales are $90…
A: Return on equity is one of the ratios that tell about the financial position of the company. It can…
Q: Baker Industries’s net income is $24,000, its interest expense is $5,000, andits tax rate is 40%.…
A: NET INCOME $ 24,000.00 COMMON EQUITY $ 250,000.00 INTEREST EXPENSES $ 5,000.00…
Q: Lilly Inc has a DSO of 20 days, and its annual sales are $3,550,000. What is its accounts receivable…
A: (Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: Jack Corp. has a profit margin of 3.5 percent, total asset turnover of 2.9, and ROE of 18.58…
A: Given information : Profit margin 0.035 Total asset turnover 2.9 Return on equity…
Q: Kaye's Kitchenware has a market/book ratio equal to 1. Its stock price is $14 per share and it has…
A: The debt-to-capital ratio refers to the measurement of the leverage associated with the company and…
Q: Wims, Inc., has sales of $18.3 million, total assets of $13.3 million and total debt of $4.1…
A: Solution:- Net income means the amount the company is earning its profits ie. Revenues – total…
Q: Butler, Inc., has a target debt-equity ratio of 1.70. Its WACC is 8.8 percent, and the tax rate is…
A: WACC reflects the average rate of return required by both equity and debt investors to finance the…
Q: The Nelson Company has $1,485,000 in current assets and $495,000 in current liabilities. Its initial…
A: > Assuming the Increase in Notes Payable or Increase in Inventory is equal to "X".> Current…
Q: Maroon Industries has a debt-equity ratio of 1.4. Its WACC is 9 percent, and its cost of debt is 4…
A: Capital Asset Pricing ModelThe Capital Asset Pricing Model (CAPM) is a financial model used to…
Q: Kaye's Kitchenware has a market/book ratio equal to 1. Its stock price is $16 per share and it has…
A: The objective of the question is to calculate the debt-to-capital ratio of Kaye's Kitchenware. The…
Q: Sugar Skull Corporation uses no debt. The weighted average cost of capital is 8.8 percent. The…
A: Variables in the question:WACC=8.8%=Current market value of equity=$17.4 million=$17,400,000Tax…
Q: 4.46 percent. at is this firm's debt-equity ratio? (Do not round intermediate cald ur answer to 2…
A: Dupont equation is quite used in calculating the return on equity using three ratio and have been…
Q: Thrice Corp. uses no debt. The weighted average cost of capital is 9.9 percent. The current market…
A: Weighted Average Cost of Capital = 9.9% or 0.099Market Value of the Equity = $18,500,000Tax Rate =…
Q: jPhone, Inc., has an equity multiplier of 1.35, total asset turnover of 1.63, and a profit margin of…
A: Equity Multiplier = 1.35 Total Asset Turnover = 1.63 Profit Margin = 7%
Q: Irving Corp. has no debt but can borrow at 7.25 percent. The firm's WACC is currently 13 percent,…
A: When firm does not have debt, cost of equity = WACC. Firm's cost of equity when it has 25% debt:…
Q: Braxton Corp. currently has one million shares outstanding but no debt. If needed, however, the…
A: After tax cost of debt = Pretax cost of debt * (1 - tax rate)Weighted average cost of capital= After…
Q: Baker Industries’ net income is $24,000, its interest expense is $4,000, and its tax rate is 25%.…
A: ROE :— The return on equity is a measure of the profitability of a business in relation to the…
Q: The Lawrence Company has a ratio of long-term debt to long-term debt plus equity of .34 and a…
A: Profit Margin = Net Profit/Sales So Net Profit = Sales * Profit Margin ROE = Net Profit/Equity So…
Q: Bento, Inc., has a target debt-equity ratio of .65. Its cost of equity is 16 percent, and its cost…
A: Debt to Equity ratio = 0.65 So, let Debt = 65 ; Equity =100; Total capital =165 Weight of debt =…
Q: Baker Industries’ net income is $24000, its interest expense is $4000, and its tax rate is 45%. Its…
A: ROE means return on equity, means how much net income has been generated on common equity of the…
Q: Jerry Rice and Grain Stores has $4,780,000 in yearly sales. The firm earns 4.5 percent on each…
A: Given, Sales $4,780,000 Net profit margin is 4.5%
Q: Borland, Inc., has a profit margin of 6.5 percent on sales of $22,600,000. Assume the firm has debt…
A: Formula: ROA = ( Net profit / Total Assets ) x 100
Q: Baker Industries' net income is $21,000, its interest expense is $4,000, and its tax rate is 25%.…
A: There are different ways to measure return on investment. Some of these measures are ROE and ROIC…
Q: Jack Corp. has a profit margin of 4.0 percent, total asset turnover of 2.1, and ROE of 16.42…
A: Return on equity = Profit margin * Total asset turnover ratio * Equity multiplier 16.42% = 4%*2.1*…
Q: enver, Incorporated, has sales of $13 million, total assets of $11 million, and total debt of $6.4…
A: The following equations need to be used to calculate net income,Return on Assets(ROA) and Return on…
Q: b. Cost of equity c. Cost of equity d-1. WACC d-2. WACC 9.76 % 12.15 X % % %
A: We can determine the cost of equity using the formula below:Then we can determine the WACC using the…
Q: Baker Industries' net income is $27, 000, its interest expense is $4,000, and its tax rate is 25%.…
A: The return on equity assesses a company's profitability in relation to the equity of its owners. It…
Q: SDJ, Inc., has net working capital of $3,550, current liabilities of $5180, and inventory of $4,690.…
A: The quick ratio is a measure used during ratio analysis of a company’s performance to find out the…
Q: a. Cost of debt b. Cost of equity % %
A: WACC=9.4%Tax rate=25%Debt-Equity Ratio=1.43, therefore if Debt is 1.43 then Equity is1Cost of…
Q: by sign. as a percent rounded to 2 decimal places, e.g., 32.16.) Answer is not complete. c-1.…
A: Return on equity ( ROE) =
Q: Baker Industries’ net income is $24000, its interest expense is $6000, and its tax rate is 40%. Its…
A: Excel Spreadsheet: Excel Workings:
Q: Vigo Vacations has $200 million in total assets, $5 million in notes payable, and $21 million in…
A: The objective of the question is to calculate the debt ratio for Vigo Vacations. The debt ratio is a…
Q: Kaye's Kitchenware has a market/book ratio equal to 1. Its stock price is $12 per share and it has…
A: Debt is very important for the business and also interest on the debt is tax deductible so it…
Q: Baker Industries’ net income is $26000, its interest expense is $6000, and its tax rate is 40%. Its…
A: Financial ratios are the ratios that draw certain results based on relations between various…
Q: Pearson Motors has a target capital structure of 35% debt and 65% common equity, with no preferred…
A: Weighted average cost of capital reflects the total cost of capital after considering the effect of…
Unlock instant AI solutions
Tap the button
to generate a solution
Click the button to generate
a solution
- baker industries net income is $24,000 ,its interest expense is $6000, and its take rate is 40%. it notes payable equals 23,000 , long term debt equals 70,000, and common equity equals 240,000. the firm's finances with only debt and common equity, so it has no preferred stock. What is the firm’s ROE and ROIC ?Rite Bite Enterprises sells toothpicks. Gross revenues last year were $8.3 million, and total costs were $4.2 million. Rite Bite has 1.5 million shares of common stock outstanding. Gross revenues and costs are expected to grow at 4 percent per year. Rite Bite pays no income taxes. All earnings are paid out as dividends. (Do not round intermediate calculations and round your answers to 2 decimal places. (e.g., 32.16)) a. If the appropriate discount rate is 14 percent and all cash flows are received at year's end, what is the price per share of Rite Bite stock? Price per share $ 28.43 b. Rite Bite has decided to produce toothbrushes. The project requires an immediate outlay of $17.8 million. In one year, another outlay of $6.8 million will be needed. The year after that, earnings will increase by $5.0 million. That profit level will be maintained in perpetuity. What will the new stock price be if the project is undertaken? Price per share $ 50.42Assume the firm has a tax rate of 23 percent. c-1. Calculate return on equity (ROE) under each of the three economic scenarios before any debt is Issued. (Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-2. Calculate the percentage changes in ROE when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-3. Calculate the return on equity (ROE) under each of the three economic scenarios assuming the firm goes through with the recapitalization. (Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-4. Given the recapitalization, calculate the percentage changes in ROE when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round…
- he Nelson Company has $1,170,000 in current assets and $450,000 in current liabilities. Its initial inventory level is $280,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.2? Do not round intermediate calculations. Round your answer to the nearest dollar. $ What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Do not round intermediate calculations. Round your answer to two decimal places.Leonatti Labs’ year-end price on its common stock is $22. The firm has a profit margin of 12 percent, total assets of $35 million, a total asset turnover of 0.60, no preferred stock, and 2 million shares of common stock outstanding. Calculate the PE ratio for Leonatti Labs. (Do not round intermediate calculations. Round your answer to 2 decimal places.) PE ration = _____.__ timesWims, Inc., has sales of $19.9 million, total assets of $14.9 million and total debt of $5.7 million. The profit margin is 12 percent. a. What is the company's net income? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) b. What is the company's ROA? (Do not round intermediate calculations and enter your answer as a percent rounded 2 decimal places, e.g., 32.16.) C. What is the company's ROE? (Do not round intermediate calculations and enter your answer as a percent rounded 2 decimal places, e.g., 32.16.) Net income a. b. ROA C. ROE % %
- SDJ, Inc., has net working capital of $2,360, current liabilities of $5,430, and inventory of $1,220. a. What is the current ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the quick ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)Dickson, Inc., has a debt-equity ratio of 2.3. The firm's weighted average cost of capital is 11 percent and its pretax cost of debt is 8 percent. The tax rate is 23 percent. a. What is the company's cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the company's unlevered cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What would the company's weighted average cost of capital be if the company's debt- equity ratio were .80 and 1.30? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) a. Cost of equity b. Unlevered cost of equity C. WACC if debt-equity ratio = 0.80 WACC if debt-equity ratio = 1.30 % % % % do do do doUrsala, Incorporated, has a target debt-equity ratio of 1.20. Its WACC is 8.7 percent, and the tax rate is 25 percent. a. If the company's cost of equity is 13 percent, what is its pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If instead you know that the aftertax cost of debt is 5.8 percent, what is the cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Cost of debt b. Cost of equity 6.31 % 13.39 %
- Byrd Enterprises has no debt. Its current total value is $47.2 million. Assume the company sells $18.5 million in debt. Ignoring taxes, what is the debt-equity ratio? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Assume the company’s tax rate is 21 percent. What is the debt-equity ratio? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.Baker Industries’ net income is $26000, its interest expense is $5000, and its tax rate is 45%. Its notes payable equals $25000, long-term debt equals $70000, and common equity equals $260000. The firm finances with only debt and common equity, so it has no preferred stock. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet What are the firm’s ROE and ROIC? Round your answers to two decimal places. Do not round intermediate calculations.Baker Industries' net income is $24,000, its interest expense is $4,000, and its tax rate is 25%. Its notes payable equals $24,000, long-term debt equals $75,000, and common equity equals $240,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm's ROE and ROIC? Do not round intermediate calculations. Round your answers to two decimal places. ROE: ROIC: 10 Hide Feedback Partially Correct