The W.C. Pruett Corp. has $850,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 8%. In addition, it has $700,000 of common equity on its balance sheet. It finances with only debt and common equity, so it has no preferred stock. Its annual sales are $3.57 million, its average tax rate is 25%, and its profit margin is 3%. What are its TIE ratio and its return on invested capital (ROIC)? Round your answers to two decimal places. TIE: ROIC: %

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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The W.C. Pruett Corp. has $850,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 8%. In addition, it has $700,000 of common equity on its balance
sheet. It finances with only debt and common equity, so it has no preferred stock. Its annual sales are $3.57 million, its average tax rate is 25%, and its profit margin is 3%. What are
its TIE ratio and its return on invested capital (ROIC)? Round your answers to two decimal places.
TIE:
ROIC:
%
Transcribed Image Text:The W.C. Pruett Corp. has $850,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 8%. In addition, it has $700,000 of common equity on its balance sheet. It finances with only debt and common equity, so it has no preferred stock. Its annual sales are $3.57 million, its average tax rate is 25%, and its profit margin is 3%. What are its TIE ratio and its return on invested capital (ROIC)? Round your answers to two decimal places. TIE: ROIC: %
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