Baker Industries' net income is $27000, its interest expense is $5000, and its tax rate is 40%. Its notes payable equals $27000, long-term debt equals $80000, and common equity equals $240000. 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. X Open spreadsheet What are the firm's ROE and ROIC? Round your answers to two decimal places. Do not round intermediate calculations. ROE ROIC 11.25 % %
Baker Industries' net income is $27000, its interest expense is $5000, and its tax rate is 40%. Its notes payable equals $27000, long-term debt equals $80000, and common equity equals $240000. 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. X Open spreadsheet What are the firm's ROE and ROIC? Round your answers to two decimal places. Do not round intermediate calculations. ROE ROIC 11.25 % %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
133.
Transcribed Image Text:Baker Industries' net income is $27000, its interest expense is $5000, and its tax rate is 40%. Its notes payable equals $27000, long-term debt equals
$80000, and common equity equals $240000. 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.
ROE
ROIC
11.25
%
1%
Transcribed Image Text:3
A
ROE and ROIC
Net income
Interest expense
Tax rate
Notes payable
0 ROE
7
8
Long-term debt
Common equity
V
5 EBT
6 Taxes
2 Partial Income Statement:
3 EBIT
4 Interest
Net income
X✓ fx =B6+B7+B8
24
25 ROIC
26
27
9 Capital Summary:
0 Notes payable
1 Long-term debt
2 Common equity
3 Total invested capital
B
$27,000
$5,000
40.00%
$27,000
$80,000
$240,000
11.25%
$5,000.00
$18,000.00
$27,000.00
$27,000.00
$80,000.00
$240,000.00
$347,000.00
7.78%
Formulas
=B3/B8
#N/A
#N/A
=(B3/(1-40%) ) 40%
=B6+B7+B8
=(B3/B23)
E
LLL
F
G
H
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