The Yellow Corp has $650,000 of debt outstanding, and it pays an interest rate of 8% annually. Its annual sales are $1.75million, its average tax rate is 25%, and its net profit margin on sales is 12 %. The company has depreciation expense of $53,840with no amortization. What is the EBITDA coverage for Yellow Corp?07.38xO 7.45x7.34xO 7.42x

EBITDA coverage is used to assess the company's ability to cover its debt obligations. EBITDA is…

Answered: The Yellow Corp has $650,000 of debt…

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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The Dynamic Group, a private equity firm headquartered in Miami, Florida (US), borrows £5,000,000 for one year at 7.35% interest. What is the dollar cost of this debt if the pound depreciates from $2.0260/E to $1.9310/€ over the year? O 2.32% O2.58% O2.85% O 2.05%
11
Alpha Resources has sales revenue of $800,000, operating costs of $400,000, and depreciation expense of $20,000. The company has $300,000 of outstanding bonds that pay 5% interest and it faces an average state-plus-federal tax rate of 40%. What is its net income?
balance sheet 20201231 (mkr): fixed assets 9540 current assets 2630 s: a assets. 1280 equity 2070 long loans 5650 short-term. liabilities. 4360 s: a EQ and liabilities 12080 Let us assume that a new share issue is carried out where the owners invest SEK 1,400 million. The money is then used to repay long-term loans of SEK 900 million and short-term liabilities of SEK 400 million. Your task is to fill in the amounts for the following items in the balance sheet after the new share issue and associated transactions described above have been completed: S assets:mkr Equity:mkr Short loans:mkr
Once Bitten Corp. uses no debt. The weighted average cost of capital is 9 percent. If the company's EBIT is $1,980,000 in perpetuity and there are no taxes, what is the company worth? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g. 1,234,567.) Note: For simplicity, in this chapter we typically assume that net capital spending equals depreciation, and net working capital remains constant. This means that EBIT (net of any taxes) will equal CFFA. Company's Value %24
Edwards Construction currently has debt outstanding with a market value of $155,000 and a cost of 10 percent. The company has EBIT of $15,500 that is expected to continue in perpetuity. Assume there are no taxes. a-1. What is the value of the company's equity? (Do not round intermediate calculations. Leave no cell blank - be certain to enter "0" wherever required.) a- What is the debt-to-value ratio? (Do not round intermediate calculations and round 2. your answer to the nearest whole number, e.g., 32.) b. What are the equity value and debt-to-value ratio if the company's growth rate is 5 percent? (Do not round intermediate calculations and round your "Debt-to- value" answer to 3 decimal places, e.g., 32.161.) c. What are the equity value and debt-to-value ratio if the company's growth rate is 7 percent? (Do not round intermediate calculations and round your "Debt-to- value" answer to 3 decimal places, e.g., 32.161.)
R2
14
) XYZ co paid $520 in dividends and $711 in interest expense. The addition to retained earnings is $497.74 and net new equity is $750. The tax rate is 34%. Sales are $6,250 and depreciation is $600. What are the earnings before interest and taxes?
choose the letter of the correct answer Yana Corp. has a profit before tax of P90 million. If the company's times interest covered ratio is 4, what is the total interest charge? a. P15Mb. P30Mc. P40Md. P50Me. P60M
Banque Langenberg holds $400 million of interest-sensitive assets and $325 million of interest-sensitive liabilities. Total assets are $500 million. Interest-sensitive assets (millions) Interest-sensitive liabilities (millions) $400.0 $325.0 Total assets $500.0 $ interest sensitive gap Relative interest sensitive gap $75.00 15.00% Interest sensitive ratio 1.23 What is the initial $ interest-sensitive gap? What is the initial relative interest-sensitive gap?
4. Binford Tools has an expected perpetual EBITDA equal to $67k. Its tax rate is 35%. Binford has $139k in debt at a cost of 6.85%. The unlevered capital cost is 10.25%. What is Binford's total value assuming interest is tax deductible?

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