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
MrRa [10]
3 years ago
10

Thrice Corp. uses no debt. The weighted average cost of capital is" 8.9" percent. The current market value of the equity is $17.

5 million and the corporate tax rate is 25 percent. What is EBIT?
Business
1 answer:
soldier1979 [14.2K]3 years ago
6 0

Answer:

EBIT = $2.076 million

Explanation:

<em>The market value can be ascertained by discounting the earnings after tax by the weighted average cost of capital (WACC).</em>

So we put dis in an equation;

Market Value = Earnings after tax /WACC

<em>Earnings after tax = (1-tax rate ) × EBIT</em>

<em>Note EBIT means earning before interest and tax. And we don't have this figure. So we denote it with  letter " y "</em>

Earnings after tax = (1-0.25) ×  y

                            = 0.75y

<em>Substitute this into the market value equation, then we have;</em>

Market Value = Earnings after tax /WACC

17.5 = 0.75y/0.089

0.75y = 17.5× 0.089

y = (17.5 × 0.089)/0.75

y = $2.076 million

EBIT = $2.076 million

You might be interested in
Ingraham Inc. currently has $205,000 in accounts receivable, and its days sales outstanding (DSO) is 71 days. It wants to reduce
Mashcka [7]

Answer:

$125,165.49

Explanation:

Daily Sales Outstanding is computed by dividing Average Accounts Receivable over Daily Credit Sales.

In this case, if the DSO is 71, then the Daily Credit Sale is $2,887.3239($205,000/71).

Then, the old sales is $1,053,873.24 ($2887.3239 x 365).

If this is reduced by 15% after the policy is implemented, the new sales is $895,792.25 ($1,053,873.23-15%) and the new daily sales is $2,454.23 ($895,792.25/365).

Using these DSO formula, the new Accounts Receivable level will be $125,165.49 (51 x $2,454.23).

4 0
4 years ago
Hi-Tek is a young start-up company that is currently retaining all of its earnings. The company plans to pay a $2 per share divi
ziro4ka [17]

Answer:

Option (a) is correct.

Explanation:

Given that,

Dividend pay in year 7, D7 = $2 per share

Growth rate of dividend, g = 2.2 percent per year

Required return, ke = 16 percent

Present value of the future dividend at year 6:

= D7 ÷ (ke - g)

= $2 ÷ (0.16 - 0.022)

= $14.49

Therefore, the present value of dividend now is as follows;

= Present value of the future dividend at year 6 × (1 + ke)^{-6}

= $14.49 × (1 + 0.16)^{-6}

= $5.95

5 0
3 years ago
Net operating working capital is equal to operating current assets minus operating current liabilities.
Alex73 [517]

Net operating working capital (NOWC) is the excess of working current belongings over running present-day liabilities.

Running capital, additionally called net running capital, represents the difference between an organization's modern-day property and cutting-edge liabilities. working capital is a measure of an employer's liquidity and quick-time period economic health.

Operating working capital focuses more on operations, while net running capital looks in any respect for property and liabilities. net working capital is more comprehensive because it represents the cash and other cutting-edge property a corporation has every day daily running and growing its enterprise.

Internet running capital is an economic metric that gauges the difference between an employer's non-interest-bearing running belongings and its non-hobby charging running liabilities.

Learn more about working capital here: brainly.com/question/26214959

#SPJ4

8 0
2 years ago
Question help fifty dash fourfifty-four wild bears were​ anesthetized, and then their weights and chest sizes were measured and
hammer [34]

Answer:

Answer: Yes, There is a linear correlation between the weights of the bears and their chest sizes because the absolute value of the test statistics 0.961 exceeds the critical value

Explanation:

Claim: There is a linear correlation between the weights of the bears and their chest sizes

Null hypothesis, H₀ : p=0                (there is no significant correlation)

Alternative hypothesis, H₁ : p ≠0    (there is no significant correlation)

Level of significance, α = 0.05

Decision rule: Reject H₀ if robserved ≥ rcritical

Sample correlation coefficient r = robserved = 0.961

Yes, There is a linear correlation between the weights of the bears and their chest sizes because the absolute value of the test statistics 0.961 exceeds the critical value

7 0
3 years ago
Which is the best approach for avoiding activation of the adductors during a floor bridge?
alexgriva [62]

Answer:

The correct answer is C

Explanation:

Floor bridge is one of the effective and useful exercise which works on the hamstrings of the person. It is performed by slowly pushing the heels, lifting the hips from the floor untill the body is in a position which is straight line from the knees to the shoulders.

So, the best approach in order to avoid any adductors while doing the floor bridge, one has to keep the feet, hip width apart and then straight ahead.

6 0
3 years ago
Other questions:
  • Each of the following represents a good habit if you’re trying to prevent ID theft EXCEPT…
    5·1 answer
  • Jones, Inc., a calendar-year taxpayer, is in the air conditioner repair business. The business uses the cash method. In December
    5·1 answer
  • Kayla is a supervisor who manages a production line. she spends several hours each week developing specific employee work assign
    13·1 answer
  • Kara realized that her school project would require her to generate new ideas in an unconventional way. in other words, kara's p
    7·1 answer
  • What are five foundations of economics?
    10·1 answer
  • The end result of the__________of the systems development life cycle (SDLC) model should give users and top management a clear v
    13·1 answer
  • On December 31, 2020, Bonita Industries has $5960000 of short-term notes payable due on February 14, 2021. On January 10, 2019,
    12·1 answer
  • Describe two other criterias that are required in order to be considered for a bachelor's degree​
    6·1 answer
  • ​a orientation helps to redefine the marketers’ focus by encouraging them to broadly consider those entities most impacted by th
    13·1 answer
  • apple, which controls over 75 percent of digital music sales, was able to dictate song pricing for years, despite the tremendous
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!