Imagine it is currently the first day of 2019. The corporate tax rate is 40% and the WACC is estimated to be 13% pa. Suppose also that there is no surplus cash in any year and that Terminal Value (TV) at the end of 2022 is estimated to be 4 times the 2022 EBIT. All amounts are given in thousands of dollars ($k) as at the last day of each year. The following forecast has been made for Zilla Ltd: Amounts in thousands of dollars ($k) 2018 (past) 2019 2020 2021 2022 Shareholders' Equity 300 312 324 337 350 Debt 200 204 208 212 208 EBIT 120 128 137 147 157 Question: Calculate the Return On Invested Capital (ROIC) for 2022. Enter your answer as a percentage and round your answer to two decimal places. For example, an answer of 0.14356 or 14.356% should be entered as 14.36. Note: The calculations in this question will be used in the proceeding questions in this quiz. Therefore, save those calculations.
Imagine it is currently the first day of 2019. The corporate tax rate is 40% and the WACC is estimated to be 13% pa. Suppose also that there is no surplus cash in any year and that Terminal Value (TV) at the end of 2022 is estimated to be 4 times the 2022 EBIT. All amounts are given in thousands of dollars ($k) as at the last day of each year. The following forecast has been made for Zilla Ltd: Amounts in thousands of dollars ($k) 2018 (past) 2019 2020 2021 2022 Shareholders' Equity 300 312 324 337 350 Debt 200 204 208 212 208 EBIT 120 128 137 147 157 Question: Calculate the Return On Invested Capital (ROIC) for 2022. Enter your answer as a percentage and round your answer to two decimal places. For example, an answer of 0.14356 or 14.356% should be entered as 14.36. Note: The calculations in this question will be used in the proceeding questions in this quiz. Therefore, save those calculations.
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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Transcribed Image Text:Imagine it is currently the first day of 2019. The corporate tax rate is 40% and the WACC is estimated to be 13% pa.
Suppose also that there is no surplus cash in any year and that Terminal Value (TV) at the end of 2022 is estimated
to be 4 times the 2022 EBIT. All amounts are given in thousands of dollars ($k) as at the last day of each year. The
following forecast has been made for Zilla Ltd:
Amounts in thousands of dollars ($k)
2018 (past)
2019
2020
2021
2022
Shareholders' Equity
300
312
324
337
350
Debt
200
204
208
212
208
EBIT
120
128
137
147
157
Question: Calculate the Return On Invested Capital (ROIC) for 2022.
Enter your answer as a percentage and round your answer to two decimal places. For example, an answer of
0.14356 or 14.356% should be entered as 14.36.
Note: The calculations in this question will be used in the proceeding questions in this quiz. Therefore, save
those calculations.
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