If financial leverage of a firm is 4, Interest 6,00,000, Operating Leverage is 3, Variable cost to sales is 66.66%, Income tax rate is 30%, Number of Equity Shares 1, 00, 000. Calculate fixed cost and EPS of the firms. (For your reference, OL = Contribution/EBIT; FL = EBIT/EBT and CL = OL*FL)
Q: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a…
A: Expected returnStandard deviationStock fund0.160.32Bond fund0.100.23Correlation0.10Risk free…
Q: orse and Buggy Incorporated is in a declining industry. Sales, earnings, and dividends are all…
A: The expected return in back alludes to the expected pick up or misfortune from speculation,…
Q: Suppose Capital One is advertising a60-month, 5.79%APR motorcycle loan. If you need to…
A: We take loans when buying large ticket items like a car, a bike, a house etc. The loan is repaid in…
Q: Required information Section Break (8-11) [The following information applies to the questions…
A: AnswerTo find Optimal risky portfolio, we should know the weights of Stock fund (S) and Bond fund…
Q: 6. Nita is preparing to go on a trip and determined she needs to bring $ 7,600. How much must she…
A: Amount to bring7600Simple Discount note6.50%Tenure, days90
Q: Suppose you feel that the values are accurate to within only ±10 percent. What are the best-case and…
A: The net present value is computed by applying a present discount rate to future cash flows, which…
Q: TJ Industries has revenue of $400,000 and expenses of $250,000. The depreciation cost is $80,000 and…
A: The objective of the question is to calculate the cash flow from operations for TJ Industries given…
Q: Burke's Corner currently selis blue jeans and T-shirts. Management is considering adding fleece tops…
A: Operating cash flow refers to the cash remaining after meeting all the operating expenses from the…
Q: Hubrey Home Inc. is considering a new three-year expansion project that requires an initial fixed…
A: Operating cash flows (OCF) is the cash flow generated from normal operationsations- Selling and…
Q: B Bhupatbhai
A: The objective of the question is to calculate the value of Lauryn's Doll Co. using the Free Cash…
Q: Keiper, Inc., is considering a new three-year expansion project that requires an initial fixed asset…
A: Operating cash flow (OCF) is the cash flow generated/used because of a firm's day-to-day operations.…
Q: You have taken out a 60-month, $22,000 car loan with an APR of 4%, compounded monthly. The monthly…
A: The amount that goes towards principal is $331.83The amount that goes towards interest is…
Q: You have a credit card with an APR of 24.99 %, monthly compounding, that has a balance of $6,600.…
A: Calculations for the original card:Monthly interest rate: Time to pay off debt: It'll take a long…
Q: What is the total amount Bae will have to repay for his $24 comma 19924,199 student loan if the…
A: The objective of the question is to calculate the total amount Bae will have to repay for his…
Q: Suppose the 1-year and 2-year OIS rates are 2% and 4%, respectively. Consider an OISswap with two…
A: Dear student, kindly check the answer in the explanation box below.Explanation:Dear student, below…
Q: NHL Inc.’s current return on equity (ROE) is 20%, its current book equity per share is $50, and it…
A: Information Provided:Current ROE = 20%Payout Ratio = 50%Current book value per share = $50Cost of…
Q: Suppose you think AppX stock is going to appreciate substantially in value in the next year. Say the…
A: Stock market:The stock market serves as a dynamic financial arena where investors buy and sell…
Q: Consider the case of another company. Kim Printing is evaluating two mutually exclusive projects.…
A: The standard deviation of a project's NPV represents the total risk of project and it is…
Q: A contract will pay you $5000 per year every other year for the next 30 years. That is, since today…
A: Compound = Every other Year = once in 2 years = 0.5Payment = p = $5000Time = t = 30 * 0.5 =…
Q: Consumers should comparison shop for credit just as they would for any other consumer good or…
A: The objective of the question is to understand the relationship between a consumer's stage of the…
Q: Apple Bond is currently sold for $1,200 with 10 years to the maturity. The current yield (CY) of…
A: The objective of this question is to find the coupon rate of the bond. The coupon rate is the annual…
Q: You are borrowing money to buy a car. If you can make payments of $280 per month starting one month…
A: Present value is the current value of future cash flows. It can be calculated by discounting the…
Q: A firm evaluates all of its projects by using the NPV decision rule. Cash Flow -$ 27,000 23,000…
A: Net Present Value (NPV) is the difference of the present value of cash inflow and the initial…
Q: A promissory note is a written statement agreeing to pay a sum of money either on demand or at a…
A: Promissory notes are like notes payable. Here the issuer of the note promises to pay the other party…
Q: A firm purchases 100 acres of land for $200,000 and agrees to remit 16 equal annual end-of-year…
A: Dear student, kindly check the answer in the explanation box below.Explanation:Part 1: Answer:The…
Q: Consider a stock currently priced at $60. Assume that in each period of one month, the stock could…
A: The objective of the question is to calculate the value of a 3-month European call option on a stock…
Q: The cost of a special purpose equipment will increase at the rate of 10% per year. If the cost for…
A: Growth Rate = g = 10%Payment = p = $10,000Time = t = 3Interest Rate = r = 12%
Q: Provide three arguments in favor of financial markets being perfect in the Caribbean. Use relevant…
A: Achieving perfect financial markets in the Caribbean is a pivotal goal for fostering economic growth…
Q: Question content area top Part 1 What sum deposited today at 6% compounded annually for 15 years…
A: The objective of the question is to find out the present value of a lump sum amount that will yield…
Q: currently at its target debt-equity ratio of .75. It's considering building a new $41 million…
A: Net present value is a discounted cash flow method used for evaluating capital investment projects.…
Q: Refer to the following table. Maturity (years) Zero-coupon YTM=r Suppose you wanted to lock in The…
A: Yield to maturity refers to the interest rate charged on the borrowed amount and paid by the…
Q: Spock Enterprises has a market value of $100 million in debt outstanding. They also have a market…
A: Total market value of debt = $100 Million Total market value of equity = $400 Million
Q: Five Star Corporation will pay a dividend of $3.18 per share next year. The company pledges to…
A: To calculate the price of the stock we will use the constant dividend growth model formula.Stock…
Q: Problem 16-01 What are the holding period and the annualized compounded returns if you buy a stock…
A: Holding period return is the return on the investment over the investment period and annualized…
Q: (TRUE or FALSE?) The PV of the ordinary annuity is larger than the PV of the annuity due because the…
A: The problem case focuses on evaluating the statement that says that the PV of an ordinary annuity is…
Q: Nowadays it is very important to reduce one's carbon footprint" (how much carbon we produce in our…
A: IRR (Internal Rate of Return) is a measure used to evaluate the profitability of a potential…
Q: In a bond portfolio, the following are the present values of all cash flows by annual period: Year…
A: Given ,Bond portfolioYear PV cash flow114.3213.2315.3410.5518.4Objective : Calculate percentage…
Q: You observe the following term structure for Treasury bills: Yield (%) 5.1 5.4 5.6 5.8 6.1 Maturity…
A: Treasury securities refer to the debt instruments issued by the U.S. Department of the Treasury to…
Q: Compute the necessary calculations and advise Apple Limited if it is worth investing in neither, in…
A: Based on the NPV calculations, it is worth investing in Project South Africa but not in Project…
Q: Angela invested $10, 500 into a fund earning 7.75% compounded monthly. She plans to withdraw $850…
A: Dear student, kindly check the answer in the explanation box below.Explanation:Part 1: Answer:To…
Q: An individual has monthly expenses of $1,800 for rent and $1,000 for groceries, transportation, and…
A: The objective of the question is to find out the average return rate that the individual should…
Q: Kramer's investment project costs $14300 and has abbual cash flows of $3800 for six years. A. What…
A: The objective of this question is to calculate the discounted payback period for Kramer's investment…
Q: We are evaluating a project that costs $1,180,000, has a life of 10 years, and has no salvage value.…
A: Cost of project $ -11,80,000.00Life of project10 YearsSales (units)59000Price Per Unit $…
Q: 18. Jerome Corporation's bonds have 15 years to maturity, a coupon rate of 8.75%, semiannual coupon…
A: The yield to call is the rate of return that an investor can expect if they hold a callable bond…
Q: Monthly loan payments Personal Finance Problem Tim Smith is shopping for a used luxury car. He has…
A: The time value of money (TVM) is a concept in finance that suggests money has different worth at…
Q: wrong give me the right answer please
A: Present value factor is computed as follows:-Present value factor = wherer= required returnn= time…
Q: Suppose you know that a company's stock currently sells for $66.60 per share and the required return…
A: Stock price = $ 66.60Required return (r) = 0.11Dividend yield = 0.055 (i.e. 0.11 / 2)Capital gain…
Q: Loan payment Determine the equal, annual, end-of-year payment required each year over the life of…
A: Principal = $42,000Interest rate = 14%/100 = 0.14 in decimalsTerm of loan = 20 yearsTo find: CF
Q: You have been accepted into college. The college guarantees that your tuition will not increase for…
A: Money deposited today$81488.35Explanation:Step 1:We have to calculate the money we must deposit…
Q: Yogi Ltd. of Varanasi, India exports "Product X" to YO Ltd of Tokyo, Japan an associated enterprise…
A: The problem case wants to identify the price used to calculate the profit from the transaction with…
If financial leverage of a firm is 4, Interest 6,00,000, Operating Leverage is 3, Variable cost to sales is 66.66%, Income tax rate is 30%, Number of Equity Shares 1, 00, 000. Calculate fixed cost and EPS of the firms. (For your reference, OL = Contribution/EBIT; FL = EBIT/EBT and CL = OL*FL)
Step by step
Solved in 5 steps with 3 images
- Please answer all. From a company we get the following:Capital employed 20,000,000 dollarDebt / equity ratio = 3Total income 40,000,000 dollarTotal profit 4,000,000 dollarInterest costs 1,500,000 dollarNet profit 2,500,000 dollara. Calculate the return on capital employed (Rsyss)b. Calculate the return on equity (Re)c. Show the relationship between profit margin and capital turnover rate and return on capital employedd. Demonstrate the relationship between the return on equity (Re) and the return on employed capital (Rsyss) with the help of the financial exchange!If the profit margin is 0.2158, asset turnover is 0.5389 and financial leverage is 1.2047, what is the return on equity? Multiple Choice 0.1163 0.1401 0.6492 0.5389Consider a company that pays out all its earnings (i.e., the payout ratio = 1 or plowback/retention ratio=0). The required return for the firm is 13%. Compute the intrinsic P/E if its ROE is 15%. Compute the intrinsic P/E if its ROE is 20%. Discuss why your answers to parts (a) and (b) differ or do not differ from one another. Suppose that the company’s ROE is 13%. Compute its intrinsic P/E value. Would the answer to part (d) change if the company retained half of its earnings instead of paying all of them out? Discuss why or why not.
- calculate the firms: d) P/E ratio given the market price above e) ROE, f) Debt-equity ratio g) Times Interest Earned Ratio, if interest and tax are 15% and 30% of sales respectively.As a consultant to Basso Inc., you have been provided with the following data: D1 = $0.68; P0 = $28.50; and g = 7.00% (constant). What is the cost of common from retained earnings based on the DCF approach? Group of answer choices 10.14% 9.10% 9.48% 9.39% 8.64%R (X) = 55x and C (x) = 30x + 250 for total revenue and total cost functions a-) profit function pi (x) for firms and b-) Find the breakeven point.
- S Firm J has net income of $124,800, sales of $960,000, and average total assets of $640,000. Required: Calculate Firm J's margin, turnover, and return on investment (ROI). Choose Numerator: Choose Numerator: Choose Numerator: Margin /Choose Denominator: Turnover /Choose Denominator: 1 1 Return on Investment /Choose Denominator: 1 1 11 11 II 11 = = || = = II Margin Margin Turnover Turnover Return on Investment Return on InvestmentAdams Inc. has the following data, rRF = 5%, RPm = 6% and Beta = 1.05. What is the firms cost of common from reinvested earning using CAPM? (11.30%, 12.72%, 11.64%, 11.99%, and 12.35%)Firm J has net Income of $81,700, sales of $950,000, and average total assets of $475,000. Required: Calculate Firm J's margin, turnover, and return on Investment (ROI). Margin Choose Numerator: /Choose Denominator: Choose Numerator: Choose Numerator: Net income 1 Turnover /Choose Denominator: Return on Investment /Choose Denominator: /Average total assets 1 = = = Margin Margin Turnover Turnover 0 0 Return on Investment Return on Investment 0
- Give typing answer with explanation and conclusion Fama's Llamas has a weighted average cost of capital of 11.5 per cent. The company's cost of equity is 16 per cent, and its cost of debt is 8.5 per cent. The tax rate is 35 per cent. What is Fama's debt–equity ratio?g. Calculate Pi in each of the following instances: a. Div Yield % = 6%, Total Return % = 16%, Po = $10 b. Capital Gain% = 8%, Div Yield % = 5%, D1 = $3 c. Capital Gain % = 10%; Do = $2; growth = 4%; Po = $40A firm has a tax burden ratio of 0.85, a leverage ratio of 1.5, an interest burden of 0.9, and a return on sales of 12%. The firm generates $2 in sales per dollar of assets. What is the firm's ROE? (Do not round intermediate calculations. Round your answer to 2 decimal place.) ROE %