Need correct answer general Accounting Company A's debt-to-equity ratio, income taxrate, and dividend payout ratio are all 30%. Thecost of debt is 11%. Company A has 2 millionshares of common stock and $27 million inlong-term bonds. Its dividend is $1.20 pershare. Find the EBIT and the price per share forCompany A.

Step 1: Define EBITWithin a business, the measure of EBIT stands for the earnings before interest…

Answered: Company A's debt-to-equity ratio,…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 79E: Ratio Analysis MJO Inc. has the following stockholders equity section of the balance sheet: On the...

See similar textbooks

Similar questions

Rebert Inc. showed the following balances for last year: Reberts net income for last year was 3,182,000. Refer to the information for Rebert Inc. above. Also, assume that the market price per share for Rebert is 51.50. Required: 1. Compute the dollar amount of preferred dividends. 2. Compute the number of common shares. 3. Compute earnings per share. (Note: Round to two decimals.) 4. Compute the price-earnings ratio. (Note: Round to the nearest whole number.)
synoec company has a debt - equity ratio of.85. return on assets is 10.4 percent, and total equity is $785, 000. what is the equity multipler? what is the return on equity? what is the net income?
Green Fire Company has a debt-equity ratio of 1.7. Return on assets is 14.25 percent, and total equity is $350,000. �What is its equity multiplier?
Kodi Company has a debt-equity ratio of 1.33. Return on assets is 7.58 percent, and total equity is $665,000. a. What is the equity multiplier? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What is the return on equity? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. c. What is the net income? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. a. Equity multiplier b. Return on equity c. Net income times %
Bowsman Fried Chicken Company has a debt-equity ratio of 0.80. Return on assets is 7.9%, and total equity is $480,000. What is the equity multiplier? Net income? Return on equity?
Hima company has a debt- equity ratio of 0.56
Bishop Co has previously calculated figures as follows:Ke = 18.5%, market value of 1 ordinary share = $2.50Kp = 5.4%, market value of one preference share = $1.95Kd(1–t)’ (irredeemable debt) = 7%, market value per $100 nominalvalue =$105Kd(1–t)’ (redeemable debt) = 6.9%, market value per $100 nominalvalue =$93.96Kd(1–t)’ (non tradable debt) = 5.4%, book value $2m.Kp = 6%, market value of one preference share(non-cummulative)= $1.70In addition the following information is relevant:Ordinary shares in issue 3.8 millionPreference shares in issue 2.5 millionPreference shares (non-cummulative) in issue 1 millionNominal value in issue of irredeemable loan notes = $6 millionNominal value of redeemable loan notes in issue = $0.8 million.Required:-Calculate the current WACC by market values.
The Two Dollar Store has a cost of equity of 11.8 percent, the YTM on the company's bonds is 6.3 percent, and the tax rate is 39 percent. If the company's debt-equity ratio a 53, what is the weighted average cost of capital A)8.58% B) 6.60% C)9.65% D) 9.04% E) 7.85%
Giantin Growing AG (GG) is currently selling for $38.50, with TTM EPS, and dividends per share of $1.36 and $0.91, respectively. The company’s P/E is 28.3, P/B is 7.1, and P/S is 2.9. The ROE is 27.0 percent, and the profit margin on sales is 10.24 percent. The treasury bond rate is 4.9 percent, the equity risk premium is 5.5 percent, and GG’s beta is 1.2. What is GG’s required rate of return, based on the capital asset pricing model (CAPM)?
What is the equity multiplier? Return on equity? Net income?
Is it possible to determine net income?
If a company’s debt-to-value ratio is 40% calculate its debt-to-equity ratio. If the dollar value of the company’s debt is $200 million calculate its market value of equity and its market value of assets. Show all calculations.

SEE MORE QUESTIONS

Recommended textbooks for you

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:

Cengage Learning

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS

Company A's debt-to-equity ratio, income tax rate, and dividend payout ratio are all 30%. The cost of debt is 11%. Company A has 2 million shares of common stock and $27 million in long-term bonds. Its dividend is $1.20 per share. Find the EBIT and the price per share for Company A.