Duval Manufacturing recently reported the following information: Net income $585,000 ROA 6% Interest expense $193,050 Accounts payable and accruals $1,000,000 Duval's tax rate is 30%. Duval finances with only debt and common equity, so it has no preferred stock. 40% of its total invested capital is debt, while 60% of its total invested capital is common equity. Calculate its basic earning power (BEP), its return on equity (ROE), and its return on invested capital (ROIC).
Duval Manufacturing recently reported the following information: Net income $585,000 ROA 6% Interest expense $193,050 Accounts payable and accruals $1,000,000 Duval's tax rate is 30%. Duval finances with only debt and common equity, so it has no preferred stock. 40% of its total invested capital is debt, while 60% of its total invested capital is common equity. Calculate its basic earning power (BEP), its return on equity (ROE), and its return on invested capital (ROIC).
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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Duval Manufacturing recently reported the following information:
Net income $585,000
ROA 6%
Interest expense $193,050
Accounts payable and accruals $1,000,000
Duval's tax rate is 30%. Duval finances with only debt and common equity, so it has no
Calculate its basic earning power (BEP), its
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