Herring Corporation has opetating income of$250,000and a25%tax rate. The firm las short-term debt of$101,000, . Long-term debt of$338,000, and common equity of$439,000. What is its retum on invested capital? a.28.475 b.34.72×1 c.24.130 d.4271 K e.2136%

Herring Corporation has opetating income of$250,000and a25%tax rate. The firm las short-term debt of$101,000, . Long-term debt of$338,000, and common equity of$439,000. What is its retum on invested capital? a.28.475 b.34.72×1 c.24.130 d.4271 K e.2136%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter6: Accounting For Financial Management

Section: Chapter Questions

Problem 10P: The Moore Corporation has operating income (EBIT) of 750,000. The companys depreciation expense is...

See similar textbooks

Related questions

Q: A company finances its operations and growth opportunities, using common equity and debt. The…

A: The WACC is stands for weighted average cost of capital. The weighted average cost of capital is…

Q: Bolero Corporation has one long term loan (interest bearing debt) of $700,000 at an interest rate of…

A: Given: Particulars Amount Rate Debt $700,000 5.20% Equity $1,000,000 16.00%

Q: ABC company has a capital structure of $7.1 million and it is made up of $5.6 million in equity and…

A: WACC considers all the sources of finance with their respective weights

Q: XYZ Ltd., experts a net income of $150,000. The company has 10% of 500,000 debentures. The equity…

Q: Sonova corporation has an operating income of $240000 and a 40% tax rate The firm has short term…

A: The operating profit (EBIT) is $240,000.The tax rate is 40%.The short term is $115,000 and long-term…

Q: A firm has EBIT of $7.5 million, a 33% tax rate, a weighted average cost of capital of 8.95% and…

A: EBIT = $7.5 MillionTax Rate = 33%Weighted Average Cost of Capital (WACC) = 8.95%Total Capital = $55…

Q: what is the firm?s ROA?

A: Return on Assets (ROA) is an important tool used by the business for determining the profitability…

Q: Intro Munding Corp. has debt with a market value of $23 million and equity with a market value of…

A: Weighted Average Cost Capital means the cost which was borne by the company in overall terms for…

Q: XYZ Ltd., experts a net income of $150,000. The company has 10% 500,000 debentures. The equity…

A: Overall Cost of Capital (Ko) = (Interest on Debt + Earnings available to equity shareholders)/ Value…

Q: Company X has debt and equity as sources of funds. Company X has market value of debt as $150,000…

A: Weighted Average Cost of Capital is the firm’s cost of capital in each category of capital is…

Q: The Jacks corporation reported the following: i. Net income $ 840,000.00 ii. Accounts payable and…

A: Ratio Analysis: This is the process of computing, determining, and presenting the relationship of…

Q: ou are given the financial information for the Unic Company: Earnings Before Interest and Tax…

A: Company Equity is the difference between the assets and liabilities of the company . We also…

Q: Alpha Corporation has average annual free cashflows to the equity holder and to the firm of…

A: Value of Equity is that money which was invested by the Equity share holder in the Company It will…

Q: Company X has debt and equity as sources of funds. Company X has market value of debt as $150,000…

A: The weighted average cost of capital WACC is a calculation of a firm's cost of capital in which each…

Q: OSA Company has the following values of interest-bearing debt and common equity capital: Financing…

A: in this we have to calculate weighted average cost of capital and than calculate the value of firm.

Q: The Dumaguete Co. has an equity cost of capital of 17%. The debt to equity ratio is 1.5 and a cost…

A: Since you have asked multiple questions, we will solve the first question for you as per policy.…

Q: You have been presented with the following information from Bogus Ltd. Source of Capital Book Value…

A: a) WACC based on Book Value WeightsStep 1: Calculate Book Value WeightsBook Value Weight (Long-term…

Q: calculate the Economic Value Added for company XYZ Ltd:

A: Economic value added is the equivalent of calculating a company's profit margin against its cost of…

Q: Assume the following data for U&P Company: Debt (D) = $100 million; Equity (E) = $300 million; rD =…

A: Debt (D) = $100 million Equity (E) = $300 million Total capital = $400 million (i.e. $100 million +…

Q: P&G has the following capital structure: $2 million in debt, $5 million in preferred stock and…

A: Here, Value of the firm is 'V' Debt is 'D' Preferred stock is 'P' Equity is 'E'

Q: Take It All Away has a cost of equity of 10 63 percent, a pretax cost of debt of 5.33 percent, and a…

A: Cost of equity (Ke) = 0.1063Pretax cost of debt (Kd) = 0.0533Tax rate (T) = 0.22Weight of debt (Wd)…

Q: Bank Three has equity = $250 million, return on provision for loans (P) = $30 million, noninterest i…

A: Banks accepts deposits but also gives the loand to borrowers so they have interest income but they…

Q: e is Icknield’s market-value balance sheet (figures in $ millions): Net working capital $550 Debt…

A: We need to compute weighted average cost of capital(WACC) of lcknield. Note: We shall use after tax…

Q: What is the ROE for a firm with a times interest earned ratio of 2, a tax liability of $1 million,…

A: Variables in the question:Times interest earned ratio=2Tax liability=$1 millionInterest…

Q: a. Calculate the economic value added for Acme and Apex (round to 2 decimal places). Economic…

A: The excess revenue earned by the firm after bearing the cost of procurement of funds is known as…

Q: Consider the following data for the firms Acme and Apex: Acme Apex Required: Equity Debt ($ million)…

A: economic value is a measure of the benefit provided by a good or service to an economic agent, and…

Q: Company X has a cost of equity of 16.31% and a pretax cost of debt of 7.8%. The debt-equity ratio is…

A: Cost of equity = Ke = 16.31%Pre-tax cost of debt = Kd = 7.8%Debt-Equity ratio = D/E = 0.56Tax rate =…

Q: The Tip-Top Paving Co. has an equity cost of capital of 16.97%. The debt to value ratio is.6, the…

A: Levered Cost of equity =16.97% Debt to value Ratio = 0.6 Tax Rate(TR) = 34% Cost fo debt(COD) =11%…

Q: hoose the correct letter of answer: The following data applies to a firm: Interest Charges P10…

A: Ratio analysis means where different ratio of various years of years companies has been compared and…

Q: Samuel Corp. provides the following information: EBIT = $386.50 Tax (TC ) = 21% Debt = $700 RU =…

A: EBIT = $386.50Tax (TC ) = 21%Debt = $700RU = 10%

Q: As an Analyst you were tasked to compute for the Weighted Average Cost of Capital of various…

A: Weighted average cost of capital (WACC) is the average cost of capital of the firm from all sources…

Question

a.28.475

b.34.72×1

c.24.130

d.4271 K

e.2136%

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Given Information:

VIEW

Step 2: Calculation:

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Similar questions

Consider the following data for the firms Acme and Apex: Equity ($ million) Debt ($ million) ROC Cost of Capital Acme 290 145 17% 9% Apex 1,450 483 15% 10% a. Calculate the economic value added for Acme and Apex (round to 2 decimal places). Economic value added for Acme $? million Economic value added for Apex $? million b. Calculate the economic value added per dollar of invested capital for Acme and Apex (round to 2 decimal places)? Economic value added for Acme per dollar Economic value added for Apex per dollar
Samuel Corp. provides the following information: EBIT = $386.50 Tax (TC ) = 21% Debt = $700 RU = 10% Question: What is the value of Samuel’s equity?
Company X has debt and equity as sources of funds. Company X has market value of debt as $150,000 and book value of debt as $80,000. The company has book value of equity as $100,000 and market value of equity as $125,000. The cost of debt is 8.25% and cost of equity is 9.57%. the tax rate is 38%. What is the Weighted Average Cost of Capital (WACC)? a. 7.59% b. 7.78% c. 7.14% d. 7.68%
The Tip-Top Paving Co. has an equity cost of capital of 16.97%. The debt to value ratio is .6, the tax rate is 34%, and the cost of debt is 11%. What is the cost of equity if Tip-Top was unlevered? O a. 10.0%. O b. 16.0%. C. 12.0%. O d. 14.0%
Company X has debt and equity as sources of funds. Company X has market value of debtas $150,000 and book value of debt as $80,000. The company has book value of equity as$100,000 and market value of equity as $125,000. The cost of debt is 8.25% and cost ofequity is 9.57%. the tax rate is 38%. What is the Weighted Average Cost of Capital(WACC)?a. 7.59%b. 7.78%c. 7.14%d. 7.68%
You are given the financial information for the Unic Company: Earnings Before Interest and Tax (EBIT) = $126.58 Corporate tax rate (TC) = 0.21 Debt (D) = $500 Unlevered cost of capital (RU) = 0.20 The cost of debt capital is 10 percent. Question: Determine the value of Unic Company equity? Determine the cost of equity capital for Unic Company? Determine the WACC for Unic Company?
Intro Munding Corp. has debt with a market value of $23 million and equity with a market value of $57 million. Its pre-tax cost of debt is 5% and its cost of equity is 11%. The firm's marginal tax rate is 21%. Part 1 What is the company's weighted average cost of capital? 3+ decimals Submit
Consider the following data for the firms Acme and Apex: Acme Apex Required: Equity Debt ($ million) ($ million) 210 1,050 105 350 ROC Cost of Capital (*) (%) 17% 9% 15% 10% a-1. Calculate the economic value added for Acme and Apex. a-2. Which firm has the higher economic value added? b-1. Calculate the economic value added per dollar of invested capital for Acme and Apex. b-2. Which firm has the higher economic value added per dollar of invested capital? Answer is not complete. Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B1 Required B2 Calculate the economic value added for Acme and Apex. Note: Enter your answers in millions rounded to 2 decimal places. Economic value added for Acme million Economic value added for Apex million
OSA Company has the following values of interest-bearing debt and common equity capital: Financing Source Dollar Amount Interest Rate Cost of CapitalShort-term loan $200,000 12%Long-term loan $200,000 14%Equity capital $600,000 22% OSI is in the 30 percent average tax bracket. A. Calculate the after-tax weighted average cost of capital for OSI. B. Given that OSI's EBIT is $300,000, compute its EVA. C. Did the venture build or destroy value? Explain. Make sure to show all the formulas and calculations in addition to any assumption needed.
A 168. Subject:- finance
Please answer multi-choice question in photo.
Assume the following data for U&P Company: Debt (D) = $100 million; Equity (E) = $300 million; rD = 6%; rE = 12%; and TC = 30%. Calculate the after-tax weighted average cost of capital (WACC): Multiple Choice A) 10.5% B) 10.05% C) 15% D) 9.45%