Given:
Sales Revenue = 150,000
ROI = 12%
turnover = 3

ROI = Margin * Turnover Margin
12% = Margin * 3
12%/3 = Margin
4% = Margin

Margin = Net Operating Income / Sales
4% = Net Operating Income / 150,000
4% * 150,000 = Net Operating Income
6,000 = Net Operating Income

4 0

3 years ago

15-10 A firm has 60,000 shares whose current price is $45.90. Those stockholders expect a return of 14%. The firm has a 3-year l

krek1111 [17]

Answer:

before taxes:

WACC 8.74959%

after a 21% tax-rate:

WACC 7.23587%

Explanation:

Equity: 60,000 x $45.90 = 2,754,000

Liabilities: 1,900,000 + 22,000 x 925 = 22,250,000

Value: 25,004,000

We solve for weights:

Ew = 2,754,000 / 25,004,000 = 0,1101423772196449

Lw = 22,250,000 / 25,004,000 = 0,8898576227803551

Cost of debt will be the market value rate of the bond That is the rate at which the future coupon payment and maturity matches the market price of the bond

we solve this using excel goal seek:

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 35.00

time 20

rate 0.040545327

$35 \times \frac{1-(1+0.0405453269606019)^{-20} }{0.0405453269606019} = PV\\$

PV $473.3728

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity $1,000.00

time 20.00

rate 0.04055

$\frac{1000}{(1 + 0.0405453269606019)^{20} } = PV$

PV 451.6270

PV c $473.3728

PV m $451.6270

Total $924.9998

a semiannual rate of 0.04055 is the market rate thus, cost of debt is

0.04055 x 2 = 0.081

Now we can solve for the WACC without taxes:

$WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})$

Ke 0.14000

Equity weight 0.1101

Kd 0.081

Debt Weight 0.8899

t 0

$WACC = 0.14(0.1101) + 0.081(1-0)(0.8899)$

WACC 8.74959%

wiht taxes of 21%

t 0.21

$WACC = 0.14(0.1101) + 0.081(1-0.21)(0.8899)$

WACC 7.23587%

4 0

4 years ago

What is gross profit

astra-53 [7]

Gross profit is net sales minus the cost of goods sold. It reveals the amount that a business earns from the sale of its goods and services before the application of additional selling and administrative expenses.

6 0

3 years ago

Read 2 more answers

Complete the following sentences.

irina [24]

Answer

The answer and procedures of the exercise are attached in the following image.

Explanation

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.

4 0

4 years ago