(Capital structure analysis) Last year the Rondoelea Products Company had $142 million in annual sales and a net profit margin of 9.6 percent. In addition, Rondoelea's average tax rate was 30 percent. If Rondoelea had $45 million of debt outstanding with an average interest rate of 10.2 percent, what is the firm's times interest earned ratio? The times interest earned ratio is times. (Round to one decimal place.)

(Capital structure analysis) Last year the Rondoelea Products Company had $142 million in annual sales and a net profit margin of 9.6 percent. In addition, Rondoelea's average tax rate was 30 percent. If Rondoelea had $45 million of debt outstanding with an average interest rate of 10.2 percent, what is the firm's times interest earned ratio? The times interest earned ratio is times. (Round to one decimal place.)

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

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Plank’s Plants had net income of $10,000 on sales of $40,000 last year. The firm paid a dividend of $2,300. Total assets were $700,000, of which $350,000 was financed by debt. a. What is the firm’s sustainable growth rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) b. If the firm grows at its sustainable growth rate, how much debt will be issued next year? (Do not round intermediate calculations.) c. What would be the maximum possible growth rate if the firm did not issue any debt next year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)
Lever Age pays an 9% rate of interest on $9.70 million of outstanding debt with face value $9.7 million. The firm's EBIT was $2.3 million. a. What is its times interest earned? (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Times interest earned 0.03 X b. If depreciation is $170,000, what is its cash coverage ratio? (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Cash coverage ratio 0.03 X
It was reported last week that Blue Bell Enterprises earned $18.5 million this year. The report also stated that the firm’s return on equity is 11 percent. The firm retains 80 percent of its earnings. What will next year's earnings be? Round to the nearest whole dollar.
Edwards Construction currently has debt outstanding with a market value of $75,000. The company has a WACC of 9 percent and has EBIT of $8,750 in the next year. The tax rate is 20%. What is the debt-to-value ratio if the EBIT’s growth rate is 5%? a. 42.86% b. 39.33% c. 96.42% d. 32.45%
Johnson Tire Distributors has debt with both a face and a market value of $90,000,000. This debt has a coupon rate of 7 percent and pays interest annually. The expected earnings before interest and taxes is a constant $50,000,000 in perpetuity. The company's tax rate is 25 percent, and the unlevered cost of capital is 25 percent. What is the firm's cost of equity? Write your answer as a percent rounded to two digits, but don't include the % sign (i.e. enter 12.63, not 0.1263). HINT: You need to use both M&M propositions. Numeric Response
XYZ anticipates earning $1,500,000 and paying $300,000 in dividends this year. XYZ's capital structure is 20% debt and 80% equity and its tax rate is 35%. Compute the equity breakpoint to the nearest dollar. Your Answer:
Manshuk
Fin320 (Capital structure analysis) Last year the Rondoelea Products Company had $134 million in annual sales and a net profit margin of 9.6 percent. In addition, Rondoelea's average tax rate was 30 percent. If Rondoelea had $37 million of debt outstanding with an average interest rate of 10.7 percent, what is the firm's times interest earned ratio? The times interest earned ratio is _____times.(Round to one decimal place.)
Pfizer currently has a Net Profit Margin of 5%, its corporate tax rate is 21% and its annual interest payments are $6 million. How much do Pfizer’s sales need to be to produce a times interest earned (TIE) of 7.0?
Forward Inc. just reported annual earnings of $1 per share this year. The firm's ROE is 0.10% and its earnings retention ratio is 0.6%. If the firm's market capitalization rate (Rs) is 15%, How much is the P/E ratio (P0/E1)?
Last year, Lakesha’s Lounge Furniture Corporation had an ROA of 5.8 percent and a dividend payout ratio of 34 percent. What is the internal growth rate? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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