Q: M&M Corporation has a WACC of 20 percent. Its cost of debt is 13 percent. If habitat’s debt-equity…
A: Source of raising capital include: Debt capital Equity capital Public deposit Retained earnings…
Q: Bama Tide Inc. typically uses debt as their main source of funding and typically only finances with…
A: The Weighted Average Cost of Capital (WACC) is calculated as the weighted sum of the cost of equity…
Q: Sixx AM Manufacturing has a target debt—equity ratio of 1.6. Its cost of equity is 0.11, and its…
A: Weight of debt = (D/E)(1+D/E) Where, D/E is debt to equity ratio Weight of debt = 1.61+1.6 =…
Q: Shanfari Company is using two forms of financing - Debt and Equity. The Cost of Debt is 4.5% and the…
A: The weighted average cost of capital is the overall cost of capital of each source of raising…
Q: Vimal Enterprises is considering a shipping project for which it proposes to employ a debt-equity…
A: Beta is defined as the measure on how an individual asset, which used to move at an increase or…
Q: Fama's Llamas has a WACC of 10.5 percent. The company's cost of equity is 12 percent, and its pretax…
A: A financial and liquidity measure called the debt-to-equity ratio shows how much debt and equity a…
Q: Rogot Instruments makes fine violins and cellos. It has $1.7 million in debt outstanding, equity…
A: Solution: Given, Capital Structure : Debt capital = $1.7 Million Equity capital = $2.9 Million Total…
Q: if
A: Is the composited cost of capital, considering the weight of all long-term finance of the company…
Q: STLE HAS A BETA OF 1.1 AT DEBT RATIO OF 25%. AND CADBURY HAS A DEBT RATIO OF 40% AND A BETA OF 1.3.…
A: Unlevered beta.Beta simply means risk. It means market risk of the company.There are two types of…
Q: Company A has a ROA of 8% and a ROE of 12 % . Company B has a ROA of 7% and an ROE of 15%. What does…
A: We will find the ratio of equity/total assets, which measures the percentage equity allocation of…
Q: Want answer
A: Step 1: GivenDept ratio = 15 % = 0.15ROE = 13 % = 0.13ROA = ? Step 2: Formula usedDebt ratio = Total…
Q: Fama's Llamas has a WACC of 9.4 percent. The company's cost of equity is 13 percent, and its pretax…
A: WACC is also known as weighted average cost of capital. It includes the cost of debt & cost of…
Q: Fama's Llamas has a WACC of 8.95 percent. The company's cost of equity is 10.4 percent, and its…
A: WACC is the weighted average cost of capital which is total weighted cost of individual source of…
Q: Bac Corp. has no debt but can borrow at 6.4 percent. The firm’s WACC is currently 10.2 percent, and…
A: The cost of capital is the expected return that a company must earn on its investments to satisfy…
Q: PT XYZ is a garment company that produces batik and other traditional clothing. The company's…
A: The unlevered firm value is the value of the firm considering that it borrows no debt and is…
Q: Universal Foods has a debt-to-value ratio of 39%, its debt is currently selling on a yield of 5%,…
A: Weighted Average Cost of Capital(WACC) It is the overall cost of capital which includes the capital…
Q: Palo Verde, Inc., has found that its cost of equity is 17 percent, and its (before-tax) cost of debt…
A: Weighted Average Cost of Capital (WACC) is the overall cost of capital from all the sources of…
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: CoffeeCarts has a cost of equity of 15%, has a pre-tax cost of debt of 4%, and is financed 70% with…
A: Given details are : Cost of Equity (Ke) = 15% Pre tax cost of debt (Kd) = 4% Weight of Equity = 70%…
Q: Sunshine Inc. has a WACC of 10.9 percent. The company's cost of equity is 12 percent, and its cost…
A: Weighted Average Cost of Capital = WACC = 10.9%Cost of Equity = ce = 12%Cost of Debt = cd = 8.9%Tax…
Q: Brannan Manufacturing has a target debt - equity ratio of 45. Its cost of equity is 11.4 percent,…
A: WACC is the weighted average cost of capital, where weight is based on the level of debt and equity…
Q: what is the difference between the two firms' ROES?
A: First we need to determine the debt value and equity value using the formula below:Debt = Debt ratio…
Q: Question: Philips, Inc. has a debt ratio of 15% and ROE =13%. What is Phillips' ROA?
A: To find Philip's Return on Assets (ROA), we can use the relationship between Return on Equity (ROE),…
Q: Apple’s debt-to-asset ratio is 35%. The before-tax cost of debt is 10% and the corporate tax rate is…
A: Debt to asset ratio = 35% Before tax cost of debt = 10% Tax rate = 45% WACC = 15% Equity to asset…
Q: Lannister Manufacturing has a target debt-equity ratio of 0.66. Its cost of equity is 16 percent,…
A: Weighted average cost of capital can be calculated as: = (Weight of equity * Cost of equity) +…
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: ABC Company has a BB credit rating. Companies with similar credit ratings are currently paying a…
A: Cost of debt refers to the effective rate that is required to be paid for the amount financed…
Q: PT XYZ is a garment company that produces batik and other traditional clothing. The company's…
A: Weighted average cost of capital shows a company average cost of capital from all the sources that…
Q: Miller Manufacturing has a target debt-equity ratio of .55. Its cost of equity is 14 percent, and…
A: Here, Target debt-equity ratio = 0.55 Cost of equity =14% Cost of debt = 7% Tax rate = 35% To Find:…
Q: CoffeeCarts has a cost of equity of 15.9%, has an effective cost of debt of 4.2%, and is financed…
A: The objective of the question is to calculate the Weighted Average Cost of Capital (WACC) for…
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: Calculating Profitability Ratios. Aorangiwai River Boats has sales of $15 million, total assets of…
A: RETURN ON ASSETSReturn on Assets is the Ratio between Net Operating Income & Average Total…
Q: Rogot Instruments makes fine violins and cellos. It has $1.8 million in debt outstanding, equity…
A: Capital Structure :Debt capital = $1.78 MillionEquity capital = $2.9 MillionTotal Capital = $1.8 +…
Q: Auto Inc., an automobile manufacturer with a current debt-to-equity ratio of 2, is considering…
A: The conceptual formula used is:
Q: Nikul
A: Step 1: The calculation of the debt-equity ratio AB1WACC8.40%2Cost of equity11%3Pretax cost of…
Q: that produces batik and other traditional clothing. The company's financial data is as follows.…
A: When a corporation raises funds by issuing debt instruments to investors, this is referred to as…
Q: Precision Cuts has a target debt-equity ratio of .48. Its cost of equity is 16.4 percent, and its…
A: To calculate the WACC we will use the below formula WACC = (Ke*We)+[Kd*(1-t)*Wd] Where Ke - Cost…
Q: Fama's Llamas has a WACC of 9.8 percent. The company's cost of equity is 13 percent, and its pretax…
A: After-tax cost of debt = Pre-tax cost × (1 - tax rate)Tax rate = 21% or 0.21After-tax cost of debt =…
Q: Seattle Health Plans currently uses zero-debt financing. Its operating profit is $1 million, and it…
A: Capital structure can be defined as the structure that depicts the proportion of debt and equity…
Q: CoffeeCarts has a cost of equity of 15.2%, has an effective cost of debt of 3.8%, and is financed…
A: A company's average after-tax cost of capital from all sources, including common stock, preferred…
Q: Universal Foods has a debt-to-value ratio of 36%, its debt is currently selling on a yield of 8%,…
A: WACC stands for weighted average cost of capital. A company’s capital is made from different sources…
Q: e. Company A has higher cost of goods sold, the same operating expenses, and lower interest expense…
A: Gross profit is the profit after the cost of goods sold and operating margin is after operating…
Q: Queen, Inc., has a total debt ratio of 0.22. What is its debt-equity ratio?
A: Debt Ratio It is a monetary indicator that assesses the degree of leverage inside an organisation.…
Q: PT XYZ is a garment company that produces batik and other traditional clothing. The company's…
A: Calculations are done in excel so there is no intermediate rounding. Value of Unlevered Company (VU)…
Q: Home Demo reports the following: Total liabilities = $38,633 million and Total assets = $42,966…
A: Debt Ratio :— It is the ratio between total debt and total assets. Levered Company :— Company…
Q: What is this firm's WACC?
A: WACC or Weighted average cost of capital is the weighted average cost of different sources of…
Q: TransPacific Inc. is an import-export company specializing in products from Asia and the West Coast.…
A: Given, Cost of debt = 9% D/V ratio = 40% Cost of equity = 13% Tax rate = 20%
MyBad Surgery Centers of America has a debt-equity ratio of 3. MyBad has a 35% tax
rate. What is MyBad’s debt ratio
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- Paraglide Corp. has a target debt-equity ratio of .48. Its cost of equity is 16.4 percent, and its pretax cost of debt is 8.2 percent. If the tax rate is 34 percent, what is the company's WACC? 11.28 percent 11.72 percent 13.20 percent 12.84 percent 12.91 percentConsider the following income statement for Larry & Harry drug stores: Revenue - 90mm Variable costs- 48mm Interest on debt- 6mm Depreciation- 0 mm It’s tax rate is 25% and the book value of its equity is 150mm. What is L&H’s coverage ratio? A) 0.18 B) 5.25 C) 6 D) 7 E) 8 F)15Sport Fishing Expeditions has a debt-equity ratio of 0.80. The pre-tax cost of debt is 7% and the required return on assets is 15%. What is the cost of equity if we factor in the firm's tax rate of 23%? 20.53% B 19.93% 18.91% 21.12% E 21.72%
- Lannister Manufacturing has a target debt-equity ratio of .85. Its cost of equity is 10 percent, and its cost of debt is 7 percent. If the tax rate is 23 percent, what is the company's WACC? (Do not round Intermedlate calculatlons and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) WACCFama's Llamas has a WACC of 8.8 percent. The company's cost of equity is 12 percent, and its pretax cost of debt is 6.8 percent. The tax rate is 22 percent. What is the company's target debt - equity ratio? Note: Do not round intermediate calculations and round your answer to 4 decimal places, e.g .. 32.1616.A
- glenboro fire prevention corp has a profit margin of 7.70% total asset turn over of 1.90 and roe of 19.17%. what is this firm debt equity ratio?AAA Inc. has a current debt-to-equity ratio of 3, and is considering expanding its operations into a new industry. Firms in this new industry face a different set of risks than AAA Inc. However, the executives at AAA Inc. observe that a company in the new industry (BBB Inc.) has a cost of equity of 14%, a cost of debt of 7%, and a debt-to-value ratio of 40%. AAA Inc. plans to finance its expansion into the new industry with 50% debt and 50% equity. The cost of debt for AAA Inc. is also 7%, and the corporate tax rate is 25%. Solve for the discount rate that AAA Inc. should use when evaluating whether to go forward with the expansionCompany X has debt and equity as source of funds..Company X has market value of debt as $ 150000 and a book value of debt as $ 80000. The company has book value of equity as $ 100000 and market value of equity as $ 125000. The cost of debt is 8.25% and cost of equity is 9.57%. The tax rate is 38%. What is WACC?
- You want to compare Rite Aid's leverage to other firms in the Retail Pharmaceutical industry. To assist you, the table below reports the industry averages for several common debt ratios. Calculate each of the ratios in the table for Rite Aid for the years ending February 28, 2004 and March 1, 2003. Ratio Definition Industry Average Rite Aid FY2004 Rite Aid FY2003 Common-size debt Total liabilities / Total assets 51.91% 99.85% 101.51% Common-size interest expense Interest expense / Net sales 0.65% 1.89% 2.09% Debt to equity Total liabilities / Total shareholders' equity 1.59 6732.96 -55.43 Long-term debt to equity Long-term debt / Total shareholder's equity 0.58 420.08 -34.39 Proportion of long-term debt due in one year Long-term debt due in one year / Total long-term debt 13.00% 0.616% 2.69% Times-interest-earned (interest coverage) (Pre-tax income + interest expense) / Interest expense 9.98x 1.11 0.53 How does Rite Aid compare to the…Blockbuster is a North American video and DVD sales and rental chain. Forecast the financial statements for Blockbuster for Year 3. Use the percent of sales method based on Year 2 and the assumptions listed below. Please note the ratios to sales provided in the table which are useful for making the forecast. In the event that taxable income is negative, calculate taxes in the usual way. Negative taxes can be interpreted as a tax refund. Sales growth of 10%. The cost of debt is 7.5%. The tax rate is 35%. The depreciation rate is 25%. CAPEX is $200M. The following accounts are held constant: Goodwill and Common Stock. Long-term debt is the PLUG account. No dividends. Blockbuster Inc. Income Statement and Balance Sheet As of December 31, Year 2 ($000's) Year 2 Ratios Forecast Revenue $5,157,600 $5,673,360 COGS 2,420,700 0.469346 SG&A 2,708,500 0.525147 Dep. Exp. 246,600 ЕBIT -218,200 Int. Exp. 78,200 Income before Tax -296,400 Income Taxes -56,100 Net Income -$240,300 ASSETS Total Current…Dollar General (DG) is choosing between financing itself with only equity or with debt and equity. Regardless of how it finances itself, the EBIT for DG will be $545.63 million. If DG does use debt, the interest expense will be $57.85 million. If DG‘s corporate tax rate is 0.30, how much will DG pay (in millions) in total to ALL investors if it uses both debt and equity? Instruction: Type ONLY your numerical answer in the unit of millions
