1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
AfilCa [17]
2 years ago
8

Tool Manufacturing has an expected EBIT of $82,000 in perpetuity and a tax rate of 24 percent. The company has $143,500 in outst

anding debt at an interest rate of 6.3 percent and its unlevered cost of capital is 13 percentWhat is the value of the firm according to M&M Proposition I with taxes?
Business
1 answer:
Dima020 [189]2 years ago
7 0

Answer:

The value of the firm according to M&M Proposition I with taxes is $513,824.62

Explanation:

Value of firm = [EBIT x (1-Tax) / Equity Cost] + [Debt x Tax rate]

Value of firm = 82000 x (1-24%) / 13% + 143500 x 24%

Value of firm = 62320 / 0.13 + 143500 x 0.24

Value of firm = 479,384.62 + 34,440‬

Value of firm = $513,824.62‬

You might be interested in
Saira, Inc. has the following income statement (in millions): SAIRA, INC. Income Statement For the Year Ended December 31, 2017,
AysviL [449]

Answer:

60%

Explanation:

To calculate the percentage assigned to cost of goods sold , we should use the formula:

=\frac{Cost Of Goods Sold}{Sales}

= \frac{180}{300}

= 0.60 = 60%

Therefore, the percentage assigned to Cost of goods sold is 60%

5 0
3 years ago
The dollar has appreciated against the currencies of many of the U.S.'s top trading partners. What outcome could this fall in fo
fenix001 [56]

Answer: Aggregate demand would shift to the left due to a decrease in US exports.

Explanation When the dollar appreciated against foreign currencies, U.S. goods and services become relatively more expensive, reducing exports and boosting imports in the United States. Such a reduction in net exports reduces aggregate demand.

6 0
3 years ago
Read 2 more answers
last year, you earned a rate of return of 7.55 percent on your bond investments. during that time, the inflation rate was 2.19 p
pychu [463]

The real rate of return is 3.15%.

What is real rate of return?
The annual percentage of financial gain on an investment that has been prorated for inflation is known as the real rate of return. As a result, the real rate of return provides an accurate representation of the real purchasing power of the a given sum of money over time. The investor can calculate how much more of a nominal return seems to be real return by adjusting this same nominal return to account for inflation. Investors must account for the effects of additional factors, including such taxes and investing fees, in addition to adjusting for inflation, in order to calculate real returns on their investments or to make investment decisions. Subtracting this same nominal interest rate from the inflation rate yields the real rate of return.


1+real rate = (1+rate of return) / (1+inflation)
1 + real rate = (1+0.0645) / (1+0.032)
1 + Real Rate = 1.0315
Real Rate = 0.0315 = 3.15%

To learn more about real rate of return
brainly.com/question/3578105
#SPJ4

4 0
10 months ago
lindsay took out a(n) to purchase her new home she use in the form of the property to back the leon lindsay also paid money in a
Afina-wow [57]

Answer: Lindsay took out a Loan to purchase her new home. Lindsay also paid money in advance this is known as a down payment. If Lindsay dose not make her loan payment on time the bank will most likely ​foreclose.

6 0
2 years ago
Read 2 more answers
During the first year of operations, a company granted warranties on its products at an estimated cost of $8,500. The product wa
NikAS [45]

During the first year of operations, a company granted warranties on its products at an estimated cost of $8,500. The product warranty expense should be recorded in the years of the expenditures to repair the products covered by the warranty payments.

True or False

the answer is false

4 0
2 years ago
Other questions:
  • Mary's Cookies submitted an ad to the local newspaper with a coupon stating that a dozen cookies cost $2.99. The newspaper inste
    15·1 answer
  • For any given product, _____ is determined by what the market will bear.
    15·1 answer
  • Teagan Company uses Departmental Overhead allocation to allocate its manufacturing overhead costs. It has identified two​ depart
    5·1 answer
  • When using the wet method, holding the spray nozzle too close to the brake surface may cause asbestos fibers to
    14·1 answer
  • Martin Distributors has the following transactions related to notes receivable during the last two months of the year.
    6·1 answer
  • Related to the Economics in Practice on page​ 77: If a hurricane results in the supply of hotel rooms decreasing and the demand
    12·1 answer
  • Last month when Holiday Creations, Inc., sold 44,000 units, total sales were $308,000, total variable expenses were $215,600, an
    6·1 answer
  • Bernson Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $49
    10·1 answer
  • Uma has been given the task of arranging for five-day conference
    12·1 answer
  • Hi mkahn :)
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!