Legget industries has total assets of $1,050,000 and total current liabilities (consisting only of accounts payable and accruals) of $150,000. Duffert finances using only long-term debt and common equity. The interest rate on its debt is 9% and its tax rate is 40%. The firm's basic earning power ratio is 15% and its debt-to capital rate is 40%. What are Duffert's ROE and ROIC? Do not round your intermediate calculations.

Q: O Perseverance Corporation is deciding whether to pursue a restricted or relaxed current asset…

A: Return on equity = Net income/equity   Roe under restricted policy is 6.5℅ and under relaxed policy…

Q: ACR Corp. has $1,312,500 in current assets and $525,000 in current liabilities. Its initial inven-…

A: The current ratio is a financial metric used to evaluate a company's short-term liquidity and its…

Q: The Anderson Corporation (an all-equity-financed firm) has a sales level of $300,000 with a 12…

A: Rate of return is the annual income earned in proportion to original investment.

Q: 1. SodaFizz has debt outstanding that has a market value of $3 million. The company's stock has a…

A: Given, The market value of debt is $3 million The market value of equity is $6 million.

Q: Beranek Corp has $560,000 of assets (which equal total invested capital), and it uses no debt-it is…

A: Total Assets / Equity = $560,000Desired debt to total capital ratio = 40% or 0.4

Q: Antwerp Co. has a debt-to-equity ratio of 1.4, a corporate tax rate of 30%, pays 4% interest on its…

A: Data given: Debt-to-equity ratio = 1.4  i.e., D/E= 1.4 Working Note #1 D/E= 1.4 1+D/E = 1+1.4…

Q: Munding Corp. has debt with a market value of $23 million and equity with a market value of $45…

A: weighted average cost of capital = [Ke x E / (E+D) ] + [ Kd x (1-t) x D / (E+D) ]WhereKe = cost of…

Q: Tool Manufacturing has an expected EBIT o 69,000 in perpetuity and a tax rate of 23 percent. The…

A: Modigliani-Miller Proposition I (MM Proposition I) is a fundamental concept in corporate finance,…

Q: a. b. C- 1. C- 2. C- 3. d. If the company were financed entirely by equity, how much would it be…

A: a. The value of the company if financed entirely by equity can be calculated using the Gordon growth…

Q: A financial analyst at your firm notes that the firm's total interest payments this year were $10…

A: The correct option is "Excluding taxes will overestimate the cost of debt."This is because the cost…

Q: McGee Corporation has fixed operating costs of $14 million and a variable cost ratio of 0.60. The…

A: Earning before interest and taxs (EBIT) =Sales-Variable cost-Fixed cost =($ 120 - $ (120 * 0.60) -…

Q: Blue Co. is funded only by debt and equity with a weighted average cost of capital at 20%. The debt…

A: Weighted average cost of capital (WACC) = 20% Debt ratio = Weight of debt (Wd) = 20% or 0.2 Weight…

Q: First one is: Hossain Health has a levered cost of equity of 13.84 percent and an unlevered cost of…

A: The objective of the question is to calculate the pre-tax cost of debt for Hossain Health. The…

Q: o Coal Company has estimated the costs of debt and equity capital (with bankruptcy and agency costs)…

A: Weighted average cost of capital of the company is the weighted cost of debt and weighted cost of…

Q: The W.C. Pruett Corp. has $450,000 of interest-bearing debt outstanding, and it pays an annual…

A: Interest Bearing Debt = d = $450,000Interest Expenses Rate = r = 11%Value of Equity = e =…

Q: Fowler, Inc., has no debt outstanding and a total market value of $200,000. Earnings before interest…

A: Step 1:a-1)We have to calculate the EPS under 3 economic conditions.Calculations are shown…

Q: common equity The W.C. Pruett Corp. has $500,000 of interest-bearing debt outstanding, and it pays…

A: TIE is used for the Time Interest Earned ratio where this ratio helps in measuring the firm's…

Q: Williamson, Inc., has a debt-equity ratio of 3. The firm's weighted average cost of capital is 12…

A: The Weighted Average Cost of Capital WACC is calculated with the help of following formula  WACC =…

Q: a-1. Calculate earnings per share (EPS) under each of the three economic scenarios before any debt…

A: Earnings per share (EPS) shows how much of a company's profits are distributed to each outstanding…

Q: Coxx, Inc., has a debt-value ratio of 0.75. The firm's weighted average cost of capital is 12…

A: The Weighted Average Cost of Capital WACC is calculated with the help of following formula WACC = Ke…

Q: Use the following information to find the external financing needed (EFN): Current sales: $6,000;…

A: In order to finance its anticipated development or expansion plans, a firm needs raise more cash…

Q: Take it all away has a cost of equity of 10.84 percent, a pretax cost of debt of 5.47 percent, and a…

A: Given, Cost of equity = 10.84%. Cost of debt = 5.47%. Tax rate = 39%. Company's capital structure =…

Q: Dickinson Company has $11,980,000 million in assets. Currently half of these assets are financed…

A: Capital structure refers to the mix of long-term financing sources a company uses to operate and…

Q: uffert Industries has total assets of $970,000 and total current liabilities (consisting only of…

A: Total assets=$970000Current liabilities=$115000BEP ratio=17%Debt=9%Tax =25%Debt/capital=40%

Q: Last year Jullan Corp. had sales of P302,225 operating costs of P267,500 and year-end assets of…

A: Ratio is a tool which is used to measure the firm’s performance by establishing relation of…

Q: ​Larry’s Levers, a large manufacturer of​ crowbars, has a book value​ debt-to-equity ratio of 0.30…

A: The objective of the question is to calculate the Weighted Average Cost of Capital (WACC) for…

Q: Duffert Industries has total assets of $1,040,000 and total current liabilities (consisting only of…

A: Here, Total Assets $ 1,040,000.00Total Current Liabilities $    105,000.00Interest Rate on…

Q: A small firm has a line of credit that bears a rate of 8%. One quarter of the firm's total financing…

A: Calculate the weighted average cost of capital (WACC) as follows:

Q: Coxx, Inc., has a debt-value ratio of 0.75. The firm's weighted average cost of capital is 12…

A: Debt-value ratio = 0.75 WACC = 12% Cost of equity = 18% Tax rate = 40%

Q: There are two firms in the same business: Air Wolf and Red Wolf. Both are in the same risk class,…

A: EBIT = $10 millionDebt (Air wolf) = $0 millionDebt (Red wolf) = $4 millionCost of equity = 8%Cost of…

Q: Charter Enterprises currently has $1.5 million in total assets and is totally equity financed. It is…

A: The capital structure of the company generally consists of some portion of debt and a balanced…

Q: The W.C. Pruett Corp. has $300,000 of interest-bearing debt outstanding, and it pays an annual…

A: Interest Bearing Debt = d = $300,000Interest Expenses Rate = r = 8%Value of Equity = e =…

Q: Black Inc.'s capital structure consists entirely of long-term debt and common equity. The cost of…

A: Cost of long term debt = 5% Tax rate = 40% After tax cost of debt (RD) = 5%*(1-0.40)…

Q: Tireless Wheels Limited has no debt financing and has a value of $60 million and EBIT of $25…

A: WACC refers to the average return that the company provides to all its stakeholders. It is…

Q: Spot Company’s balance sheet consists of the following: $790 million and $230 million. Its current…

A: Weighted average cost of capital is the average cost of using the finance by the company. Finances…

Q: Jefferson Electrical Supply has a cost of equity of 12% and an unlevered cost of capital of 10.5%.…

A: The equity cost levered refers to the cost that is adjusted with the tax rates given. The unlevered…

Q: Purple Panda Products Inc. has a total asset turnover ratio of 3.50x, net annual sales of $25…

A: The objective of the question is to calculate the debt management ratios for Purple Panda Products…

Q: The W.C. Pruett Corp. has $1,000,000 of interest-bearing debt outstanding, and it pays an annual…

A: ROIC is return on capital employed can be found out by net income and total capital employed.Time…

Q: Wilmore Company Limited is a levered entity with percentage of debt out of total capital being 40%.…

A: The cost of debt is the effective interest rate a company pays on its debt.

Q: Dickinson Company has $11,820,000 million in assets. Currently half of these assets are financed…

A: