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mrs_skeptik [129]
3 years ago
11

Bon Temps' financial statements show the following information: Average cost of funds 10.0 %, EBIT $ 500,000, Total capital $1,2

50,000, EPS $2.00, Shares outstanding 150,000, Marginal tax rate 30.0%.
(1) Compute the company's economic value added (EVA).
(2) Suppose that normally Bon Temps' P/E ratio is 20. Using the information given, estimate the market price per share for Bon Temps' common stock.
Business
1 answer:
s344n2d4d5 [400]3 years ago
3 0

Answer:

1. $225,000

2. $40

Explanation:

1. The computation of company's economic value added is shown below:-

= Earning before interest and tax × (1 - Tax rate) - (Total Capital × Cost of capital)

= $500,000 × (1 - 30%) - ($1,250,000 × 10%)

= $350,000 - $125,000

= $225,000

2.  The computation of market price per share is shown below:-

= Earning per share × Price per earning ratio

= $2 × 20

= $40

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Sammy says, “I don’t think it’s fair that I have to pay for car insurance when I’m a super safe driver.” Explain why this logic
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3 years ago
In a unionized firm, the _____ clause of the collective bargaining agreement typically retains for management the authority to i
solmaris [256]
The answer is:  "management rights" .
_________________________________________________________
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3 years ago
What is economics, and how are the three sectors of the economy linked?
marysya [2.9K]

Answer:

This is a part of my Economic Resources doc and I'm not sure about the second part of the question but I hope it helps!

Explanation:

Economic Resources

For a firm (producer) to make any product, it needs to use ECONOMIC RESOURCES. These are INPUTS to be used together or combined efficiently to produce goods/services.

What you need to know:

What is a PRODUCER?

a person, franchise, brand or country etc. that makes, grows, or produces goods and services for sale to customers or consumers.

What is a RESOURCE?

a stock or supply of goods, materials, and products that can be bought  by a person or organization in order to function effectively.

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3 0
3 years ago
A firm has current liabilities of $500, a current ratio of 1.5, and a quick ratio of 1.1. calculate the level of inventory for t
SCORPION-xisa [38]

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CA = $500 (1.5) = $750


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4 0
3 years ago
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