Garden Tools Inc. has bonds, preferred stock, and common stocks outstanding. The number of securities outstanding, the current market price, and the required rate of return for these securities are stated in the table below. The firm's tax rate is 35%. Calculate the firm's WACC adjusted for taxes using the market information in the table. Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box) The Number of Securities Outstanding Selling price The Required Rate of Return Bonds 1,785 $1,299 9.29% Preferred Stocks 4,977 $89.60 17.64% Common Stocks 1,900 $70.48 15.40%

Garden Tools Inc. has bonds, preferred stock, and common stocks outstanding. The number of securities outstanding, the current market price, and the required rate of return for these securities are stated in the table below. The firm's tax rate is 35%. Calculate the firm's WACC adjusted for taxes using the market information in the table. Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box) The Number of Securities Outstanding Selling price The Required Rate of Return Bonds 1,785 $1,299 9.29% Preferred Stocks 4,977 $89.60 17.64% Common Stocks 1,900 $70.48 15.40%

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

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

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

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 33BEB: The income statement, statement of retained earnings, and balance sheet for Santiago Systems are as...

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The income statement, statement of retained earnings, and balance sheet for Santiago Systems are as follows: Includes both state and federal taxes. Refer to the information for Santiago Systems above. Required: Note: Round answers to four decimal places. 1. Calculate the average common stockholders equity. 2. Calculate the return on stockholders equity.
Albion Inc. provided the following information for its most recent year of operations. The tax rate is 40%. Required: 1. Compute the following: (a) return on sales, (b) return on assets, (c) return on stockholders equity, (d) earnings per share, (e) price-earnings ratio, (f) dividend yield, and (g) dividend payout ratio. 2. CONCEPTUAL CONNECTION If you were considering purchasing stock in Albion, which of the above ratios would be of most interest to you? Explain.
Enter answer to 2 decimal places.
A company has a debt-equity ratio of 1.25. Its weighted average cost of capital is 8.3 percent, and its cost of debt is 5.1 percent. The corporate tax rate is 21 percent. What is the company's cost of levered equity? Enter your answer in the box shown below as a decimal number (not as a percentage) with 4 digits to the right of the decimal point.
You are evaluating the balance sheet for SophieLex’s Corporation. From the balance sheet you find the following balances: cash and marketable securities = $450,000; accounts receivable = $1,100,000; inventory = $2,000,000; accrued wages and taxes = $450,000; accounts payable = $750,000; and notes payable = $500,000. Calculate SophieLex’s current ratio. (Round your answer to 2 decimal places.) Calculate SophieLex’s quick ratio. (Round your answer to 2 decimal places.) Calculate SophieLex’s cash ratio. (Round your answer to 2 decimal places.)
Easter Egg and Poultry Company has $1,700,000 in assets and $681,000 of debt. It reports net income of $148,000. a. What is the firm's return on assets? Note: Enter your answer as a percent rounded to 2 decimal places. Return on assets b. What is its return on stockholders' equity? Note: Enter your answer as a percent rounded to 2 decimal places. Return on equity ......... Profit margin % c. If the firm has an asset turnover ratio of 1 times, what is the profit margin (return on sales)? Note: Enter your answer as a percent rounded to 2 decimal places. % %
One third of company X's asset purchases were financed by taking out a loan from the bank. The remainder of the asset purchases were financed by selling shares of company X's common stock. What is the financial leverage (ratio) that describes this situation? Round your answer to two decimal places if necessary. Report any percentages as decimals (ie: write .05 instead of 5%). The answer is not 0.5 or 0.33
A company has a debt-to-equity ratio of 0.4. The discount rates for the company's stock and bond are 20% and 10%, respectively. Assuming a 21% income tax rate, what is the company's weighted average cost of capital (WACC)? Note: Write your answer in decimal (3 or more decimal places). For example, write 0.367 instead of 36.7%.
The Jamesway Printing Corporation has current assets of $3.2 million. Of this total, $1.2 million is inventory, $0.5 million is cash, $1.0 million is accounts receivable, and the balance is marketable securities. Jamesway has $1.5 million in current liabilities. Round your answers to two decimal places. a. What are the current and the quick ratios for Jamesway? Current ratio: X Quick ratio: b. If Jamesway takes $0.25 million in cash and pays off $0.25 million of current liabilities, what happens to its current and quick ratios? What happens to its real liquidity? New current ratio: X New quick ratio: c. If Jamesway sells $0.6 million of its accounts receivable to a bank and uses the proceeds to pay off short-term debt obligations, what happens to its current and quick ratios? New current ratio: New quick ratio: d. If Jamesway sells $1.2 million in new stock and places the proceeds in marketable securities, what happens to its current and quick ratios? New current ratio: New quick…
Andyco, Inc., has the following balance sheet and an equity market-to-book ratio of 1.7. Assuming the market value of debt equals its book value, what weights should it use for its WACC calculation? Assets Liabilities & Equity $1,100 Debt $480 Equity $620 The debt weight for the WACC calculation is %. (Round to two decimal places.) The equity weight for the WACC calculation is %. (Round to two decimal places.)
a)Assume that the following data is extracted from the financial statements of Richy-Rich bank: equity is $350 million, interest expense is $115 million, provision for loan loss (P) is $35 million, noninterest income is $30 million, noninterest expense is $50 million and a tax rate is 33%. What is the minimum total interest income required to give a return on equity (ROE) of 20%? Show workings when necessary. b) Be-smart Bank reported an equity multipler ratio of 6.5 at the end of year 2021. If the bank’s total debt at the end of year 2021 was $5 million, how much of its assets were financed with equity? Show calculations when necessary. c) What are the main sources of funding for commercial banks? Using bullet points, classify these sources and briefly describe each category.
The attached file contains hypothetical data for working this problem. Goodman Corporation’s and Landry Incorporated’s stock prices and dividends, along with the Market Index, are shown in the file. Stock prices are reported for December 31 of each year, and dividends reflect those paid during the year. The market data are adjusted to include dividends. On a stand-alone basis which corporation is the least risky?