Q: stes Park, Inc., has declared a dividend of $5.90 per share. Suppose capital gains are not taxed,…
A: If the stock is about to go tax ex-dividend, then the price of the stock will be fall to the extent…
Q: GS Co. has a financial break-even point at P260,000. Th company paid an annual interest of P80,000…
A: Financial Breakeven point is the minimum level of EBIT needed to satisfy all the fixed financial…
Q: Griffey Communications recently realized $87,500 in operating income. The company had interest…
A: The base of an income tax system is referred to as taxable income. In other words, the amount of…
Q: National Co. has an ROE of 15 percent, a debt ratio of 40 percent, and a profit margin of 6 percent.…
A: The requirement is to compute the company's sales where is given that the company's ROE is 15…
Q: Tea Blending Specialists has no debt outstanding and a total market value of $349,680. Earnings…
A: Share repurchase refers to those transactions in which a company buys back its own shares. The…
Q: Griffey Communications recently realized $112,500 in operating income. The company had interest…
A: Information Provided:Operating Income = $112,500Interest income = $30,000Dividend income =…
Q: What is the share price of the company's stock? (Do not round intermediate calculations and round…
A: Share Price: It represents the current value to the sellers and buyers which is dictated by demand…
Q: Griffey Communications recently realized $100, 000 in operating income. The company had interest…
A: To calculate the tax liability of Griffey Communications, we need to consider the different types of…
Q: Griffey Communications recently realized $102,500 in operating income. The company had interest…
A: Variables in the question:Operating income=$102,500Interest income=$15000Dividend…
Q: International Cargo Inc. which is subjected to 20% tax rate employs residual dividend policy to its…
A: To compute the dividend yield, it is necessary to calculate those variables that are major…
Q: he most recent financial statements for Kerch, Inc., are shown here (assuming no income taxes):…
A: External financing needed is the amount of additional funds required by the company to support the…
Q: A C corporation earns $7.80 per share before taxes. The corporate tax rate is 39%, the personal tax…
A: Therefore, the total tax amount is $3.64.
Q: Broward Manufacturing recently reported the following information: Net income ROA BEP: Interest…
A: Return on Invested Capital (ROIC) measures how well a business earns returns on its capital…
Q: The W.C. Pruett Corp. has $500,000 of interest-bearing debt outstanding, and it pays an annual…
A: Debt = d = $500,000Interest Rate = r = 11%Equity = e = $800,000Sales = s = $1.95 millionTax Rate = t…
Q: Broward Manufacturing recently reported the following information: $741,000 8% Net income ROA…
A: Given we have, Net income= 741000 ROA= 8% interest expense= 229,710 accounts payable and accruals=…
Q: The W.C. Corp. has $600,000 of interest-bearing debt outstanding, and it pays an annual interest…
A:
Q: Baker Industries’s net income is $24,000, its interest expense is $5,000, andits tax rate is 40%.…
A: NET INCOME $ 24,000.00 COMMON EQUITY $ 250,000.00 INTEREST EXPENSES $ 5,000.00…
Q: Yaya Inc. has earnings before interest and taxes of P4,750,000. The company’s total depreciation and…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Santa, Inc. recently reported that its earnings per share were $3.00. The company has 200,000…
A: Operating income (EBIT) is a measure of a company's profitability that looks at its earnings before…
Q: White Chocolate Co. has a current period cash flow of $1.2 million and pays no dividends. The…
A: Stock used to comprise all the shares into the ownership of the company and are divided in finance.…
Q: Baker Industries’ net income is $23,000, its interest expense is $4,000, and its tax rate is 45%.…
A: Therefore, the ROE is 9.02%.
Q: ny has a financial break-even point at P163,500. How much is the total preferred dividends to be…
A: Financial break even point is a point where earning per share of the entity is equal to zero.
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: Baker Industries' net income is $24,000, its interest expense is $4,000, and its tax rate is 25%.…
A: The objective of the question is to calculate the Return on Equity (ROE) and Return on Invested…
Q: Assume a 50% dividend exclusion for taxes on dividends.
A: Information Provided: Operating Income = $112,500 Interest income = $25,000 Dividend income =…
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: Irving Corp. has no debt but can borrow at 7.25 percent. The firm's WACC is currently 13 percent,…
A: When firm does not have debt, cost of equity = WACC. Firm's cost of equity when it has 25% debt:…
Q: The W.C. Pruett Corp. has $600,000 of interest-bearing debt outstanding,and it pays an annual…
A: Given, The W.C. Pruett Corp. has $600,000 of interest-bearing debt outstanding,and it pays an annual…
Q: Behlens Manufacturing has calculated its earnings per share as $1.25. If the corporation has 500,000…
A: Earnings per share is the earnings available for each shareholder in the company. This is calculated…
Q: Key Motors has a cost of equity of 14.26 percent and an unlevered cost of capital of 11.34 percent.…
A: levered cost of equity formula: re=ru+DV-D×ru -rd×1-taxwhere,re= levered cost of equityru= unlevered…
Q: Baker Industries’ net income is $24,000, its interest expense is $4,000, and its tax rate is 25%.…
A: ROE :— The return on equity is a measure of the profitability of a business in relation to the…
Q: Assume that the Net Profit Margin Ratio of Company R is 5%, the equity multiplier is 5 and the…
A: Net Profit Margin ratio = 5%Equity Multiplier = 5Sales = s = $4000Total Liabilities = tl = $8000
Q: A firm has net income of $500,000 and sales of $18,000,000. Its interest expense is $180,000 and the…
A: Net Income = ni = $500,000Sales = s = $18,000,000Interest Expenses = i = 180,000Tax rate = t = 30%
Q: Rashad Inc. has an ROE of 15%, a debt ratio of 40%, and a profit margin of 5%. The company’s total…
A: ROE 15% DEBT RATIO 40% PROFIT MARGIN 5% TOTAL ASSETS 800 MILLION
Q: King, Incorporated, has debt outstanding with a face value of $5.5 million. The value of the firm if…
A: Debt outstanding = $5,500,000Value of equity = $24,700,000Outstanding Stock = 390,000Price Per Share…
Q: LUGAW Inc. has an earnings before interest and taxes of P4,750,000. The company’s total depreciation…
A: Taxes = Earnings before interest and taxes x tax rate = P4,750,000 X 30% = P1,425,000
Q: Vhea Corp has an operating profit of P1,200 produced from P9,800 in sales. If Vhea has no interest…
A: Formula: Net Profit= Gross operating Profit (1- Tax Rate)- Dividend Net Profit Margin= Net…
Q: LMN Corporation, a real estate company, is planning to pay a dividend of $0.80 per share. Most of…
A: Dividend = $0.80 per share Income tax, Tc = 40.00% Capital gain tax, Td = 27.00% Exemption, E =…
Q: Griffey Communications recently realized $120,000 in operating income. The company had interest…
A: The objective of the question is to calculate the tax liability of Griffey Communications given its…
Q: Ladders, Inc. has a net profit margin of 5.4% on sales of $49.3 million. It has book value of equity…
A: Profitability ratios refer to the type of ratios that evaluate the financial performance of the…
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: Baker Industries' net income is $21,000, its interest expense is $4,000, and its tax rate is 25%.…
A: There are different ways to measure return on investment. Some of these measures are ROE and ROIC…
Q: Baker Industries' net income is $27, 000, its interest expense is $4,000, and its tax rate is 25%.…
A: The return on equity assesses a company's profitability in relation to the equity of its owners. It…
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: Bulldogs Inc. has a financial break-even point at P163,500. How much is the total preferred…
A: Financial breakeven deals with bottom line of company income statement. It is the level of EBIT at…
The Simpson's Corp. has operating profit of $200,000 on sales of $2,000,000. Simpson’s does not have any interest expense. Simpson's is in the 40% tax bracket. Simpson’s does not have any
![](/static/compass_v2/shared-icons/check-mark.png)
The income generated by a business in the course of normal operations, after deducting the direct costs, is known as Operating Income.
Operating profit margin can be calculated as:
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
- 1. Tommy’s Woodworking had sales of $4 million this past year. Its COGS was $2.75 million and its operating expenses were $800,000. Interest expenses on outstanding debt were $200,000 and the company paid $40,000 in stock dividends. Its tax rate is 35%. What was the company’s taxable income (EBT) and tax liability (tax expense)?Ignoring tax considerations, assuming that the company's TIE ratio is 2.5x and the earnings before taxes amounted P300,000, determine the degree of financial leverage. Assume no preferred stock dividends paid.Griffey Communications recently realized $90,000 in operating income. The company had interest income of $35,000 and realized $70,000 in dividend income. The company’s interest expense was $60,000. Its corporate tax rate is 25%. Griffey is a small company, so it is not subject to the interest expense deduction limitation. Assume a 50% dividend exclusion for taxes on dividends
- Optimized Co. has a current period cash flow of $1.1 million and pays no dividends. The present value of the company's future cash flows is $13 million. The company is entirely financed with equity and has 610,000 shares outstanding. Assume the dividend tax rate is zero. a. What is the share price of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Share price b. Suppose the board of directors of the company announces its plan to pay out 50 percent of its current cash flow as cash dividends to its shareholders. Jeff Miller, who owns 1,300 shares of the company's stock, wants to achieve a zero payout policy on his own, by buying or selling shares. How many shares should he sell or buy? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Number of shares to # 3 * 4 O werd % 5 a J 10 6 & 7 8 K◄◄Griffey Communications recently realized $110,000 in operating income. The company had interest income of $35,000 and realized $70,000 in dividend income. The company’s interest expense was $55,000. Its corporate tax rate is 25%. Griffey is a small company, so it is not subject to the interest expense deduction limitation. Assume a 50% dividend exclusion for taxes on dividends. Which of the following most closely matches the tax liability of Griffey Communications? a. $53,750 b. $45,000 c. $40,000 d. $22,500 e. $31,250 Last year, Stewart-Stern Inc. reported $11,250 of sales, $4,500 of operating costs other than depreciation, and $1,250 of depreciation. The company had $4,500 of bonds outstanding that carry a 7.00% interest rate, and its federal-plus-state income tax rate was 25.00%. During last year, the firm had expenditures on fixed assets and net operating working capital that totaled $1,500. These…(MORNING) AC corporation earns $4.30 per share before taxes. The corporate tax rate is 35%, the personal tax rate on dividends is 20%, and the personal tax rate on non-dividend income is 39%. What is the total amount of taxes paid if the company pay $2.00 dividend? This questuon: 10 polniS) possibie O A. $2.29 O B. $2.67 OC. $1.91 O D. $1.52 O Time Remaining: 00:50:30 Next O tv MacBook Air DII DD 80 F12 F9 F10 F11 esc F5 F6 F7 F8 F1 F2 F3 F4 @ $ & delete %3D 1 2 4 7 { Y U P Q W E tab J K = - .. .. - *
- Rite Bite Enterprises sells toothpicks. Gross revenues last year were $8.3 million, and total costs were $4.2 million. Rite Bite has 1.5 million shares of common stock outstanding. Gross revenues and costs are expected to grow at 4 percent per year. Rite Bite pays no income taxes. All earnings are paid out as dividends. (Do not round intermediate calculations and round your answers to 2 decimal places. (e.g., 32.16)) a. If the appropriate discount rate is 14 percent and all cash flows are received at year's end, what is the price per share of Rite Bite stock? Price per share $ 28.43 b. Rite Bite has decided to produce toothbrushes. The project requires an immediate outlay of $17.8 million. In one year, another outlay of $6.8 million will be needed. The year after that, earnings will increase by $5.0 million. That profit level will be maintained in perpetuity. What will the new stock price be if the project is undertaken? Price per share $ 50.42Assume that Clampett, Inc. has $200,000 of sales, $150,000 of cost of goods sold, $60,000 of interest income, and $40,000 of dividends. What is Clampett, Inc.'s excess net passive income? $25,000. $75,000. $100,000. $0. None of the choices are correct.Broward Manufacturing recently reported the following information: Net income $770,000 ROA 7% Interest expense $292,600 Accounts payable and accruals $1,000,000 Broward's tax rate is 40%. Broward finances with only debt and common equity, so it has no preferred stock. 40% of its total invested capital is debt, while 60% of its total invested capital is common equity. Calculate its basic earning power (BEP), its return on equity (ROE), and its return on invested capital (ROIC). Do not round intermediate calculations. Round your answers to two decimal places. ВЕР % ROE % ROIC
- Jerry Jeff, Inc. has 14,900 shares of common stock outstanding at a price per share of $77 and the rate of return on the stock is 11.69 percent. The value of Jerry Jeff's debt is $586,800 and the required rate of return on the debt is 6.17 percent. What is the Jerry Jeff's WACC if the tax rate is 21 percent? Multiple Choice 9.82% 8.53% 8.70% 9.38%The following is ABC Inc.’s balance sheet (in thousands): Also, sales equal $500, cost of goods sold equals $360, interest payments equal $62, taxes equal $56, and net income equals $22. The beginning retained earnings is $0, the market value of equity is equal to its book value, and the company pays no dividends. Calculate Altman’s Z score for ABC, Inc. if ABC has a 50 percent dividend payout ratio and the market value of equity is equal to its book value. Recall the following: Net working capital = Current assets − Current liabilities Current assets = Cash + Accounts receivable + Inve ntories Current liabilities = Accounts payable + Accruals + Notes payableBulldogs Inc., that has an applicable tax rate of 25%, is half funded by the creditors and the remaining by ordinary shareholders. The Weighted Average cost of Capital of the firm is 20%. Based on the discounted cash flow model the Bulldogs Inc. computed its cost of equity at 10%. What is the after-tax cost of debt? (In percentage, type the percentage sign on your answer)
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Foundations Of Finance](https://www.bartleby.com/isbn_cover_images/9780134897264/9780134897264_smallCoverImage.gif)
![Fundamentals of Financial Management (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781337395250/9781337395250_smallCoverImage.gif)
![Corporate Finance (The Mcgraw-hill/Irwin Series i…](https://www.bartleby.com/isbn_cover_images/9780077861759/9780077861759_smallCoverImage.gif)
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Foundations Of Finance](https://www.bartleby.com/isbn_cover_images/9780134897264/9780134897264_smallCoverImage.gif)
![Fundamentals of Financial Management (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781337395250/9781337395250_smallCoverImage.gif)
![Corporate Finance (The Mcgraw-hill/Irwin Series i…](https://www.bartleby.com/isbn_cover_images/9780077861759/9780077861759_smallCoverImage.gif)