If a company had a beta of 1.2 at a D/E level of 0.4, what would its beta be at a D/E level of 0.8? (Assume a tax rate of 28%.) a. 0.86 b. 0.93 c. 1.36 d. 1.50
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If a company had a beta of 1.2 at a D/E level of 0.4, what would its beta be at a D/E level of 0.8? (Assume a tax rate of 28%.)
0.86
0.93
1.36
1.50
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- Calculate the company's asset beta, if the firm's equity beta is 1.6, the debt equity ratio is 0.6 and the marginal tax rate is 30%. Select a O O 1.1268 2.1268 O 1.2618 2.216Choose the correct letter of answer and provide solution The following data applies to a firm: Interest charges=P50,000.00; Sales = P300,000.00; Tax Rate=P25%; Net Profit Margin=3%. What is the firm's time interest covered ratio? a. 0.24b. 0.54c. 1.04d. 1.24e. 1.44Given the information below on peer companies A-D, calculate the beta for company E if it has net debt/equity of 0.75 and a tax rate of 35%. O 1.03 1.05 O 1.02 O 0.97 Company A B C D Beta 1.12 1.31 1.45 1.08 Net debt / equity 1.15 1.48 1.23 0.95 tax rate 35% 35% 35% 35%
- Given the information below on peer companies A-E, calculate the beta for company F if it has net debt/equity of 0.72 and a tax rate of 25%. 0.98 0.95 1.02 O 1.06 Company ABCDE Betal 1.23 1.18 1.05 0.95 0.91 Net debt / equity 1.45 1.24 0.85 0.59 0.45 tax rate 25% 25% 25% 25% 25%A firm's equity beta is 1.1. Its tax rate is 30 per cent and debt-equity ratio is 4:5. What is the asset beta O a. 0.91 O b. 0.71 O c. 0.81 O d. 0.61Assume that a company borrows at a cost of 0.08. Its tax rate is 0.35. What is the minimum after-tax cost of capital for a certain cash flow if a. 100 percent debt is used? b. 100 percent common stock? (assume that the stockholders will accept 0.08)
- Choose the correct letter of answer: The following data applies to a firm: Interest Charges P10 Million, Sales/CGS P80 Million, Tax Rate 50% and Net profit margin 10%. What is the firm's interest covered ration? a. 1.6b. 2.6c. 3.6d. 4.6e. 5.6Assume a firm increases its revenue by $148 while increasing its cost of goods sold by $117. How much additional tax will the firm owe if its marginal tax rate is 21%? Multiple Choice $6.51 $10.86 $17.11 $28.36Suppose Essen Corp has the following weights and costs. What is the WACC if the company has a 21% tax rate? Component Common equity Debt (before tax) R 11.5% 0.8 0.2 7.5% 10.39% ()8.71% ()6.25% 9.50% 10.70% Page 29 of 30 Previous Page Next Page
- As an Analyst you were tasked to compute for the Weighted Average Cost of Capital of variouscompanies given the following information. Income tax rate is 25% a. What is the cost of equity of each companies?b. What is the after tax cost of debt of each companies?c. What is the WACC of each companies? W Corp A Corp Co. Corp Ca Corp Risk Free rate 4.00% 3.00% 2.00% 3.50% Beta 1.25 % 1.50% 1.30% 1.40% Market Return 12.00% 11.00 % 10:00% 8:00% Debt to Equity Ratio 2.5 3 4 3.5 Credit Spread om BPS 200 300 250 150Use the following information for Cronos Group, Inc. (CRON): EBIT / Revenue 25.50% Government Tax Rate 42.50% Revenue / Assets 1.95 times Current Ratio 3.15 times EBT / EBIT 0.80 times Assets / Equity 2.00 times Its interest coverage ratio is closest to: A. 2.50. B. 5.00. C. 7.15. D. 9.25.If the state tax rate is 20% and the federal tax rate is 30%, what is the total effective tax rate? a. 34% b. 50% c. 44% d. 37% 2. Holding all other variables constant, which of the following would increase return on equity? An increase in _____________. a. the tax rate b. the equity ratio (equity/total assets) c. total assets d. total asset turnover