If a company had a beta of 1.2 at a D/E level of 0.4, what would its beta be at a D/E level of 0.8? (Assume a tax rate of 28%.) a. 0.86 b. 0.93 c. 1.36 d. 1.50
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If a company had a beta of 1.2 at a D/E level of 0.4, what would its beta be at a D/E level of 0.8? (Assume a tax rate of 28%.)
0.86
0.93
1.36
1.50
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- Calculate the company's asset beta, if the firm's equity beta is 1.6, the debt equity ratio is 0.6 and the marginal tax rate is 30%. Select a O O 1.1268 2.1268 O 1.2618 2.216Choose the correct letter of answer and provide solution The following data applies to a firm: Interest charges=P50,000.00; Sales = P300,000.00; Tax Rate=P25%; Net Profit Margin=3%. What is the firm's time interest covered ratio? a. 0.24b. 0.54c. 1.04d. 1.24e. 1.44Given the information below on peer companies A-D, calculate the beta for company E if it has net debt/equity of 0.75 and a tax rate of 35%. O 1.03 1.05 O 1.02 O 0.97 Company A B C D Beta 1.12 1.31 1.45 1.08 Net debt / equity 1.15 1.48 1.23 0.95 tax rate 35% 35% 35% 35%
- Given the information below on peer companies A-E, calculate the beta for company F if it has net debt/equity of 0.72 and a tax rate of 25%. 0.98 0.95 1.02 O 1.06 Company ABCDE Betal 1.23 1.18 1.05 0.95 0.91 Net debt / equity 1.45 1.24 0.85 0.59 0.45 tax rate 25% 25% 25% 25% 25%Assume that a company borrows at a cost of 0.08. Its tax rate is 0.35. What is the minimum after-tax cost of capital for a certain cash flow if a. 100 percent debt is used? b. 100 percent common stock? (assume that the stockholders will accept 0.08)A firm's equity beta is 1.1. Its tax rate is 30 per cent and debt-equity ratio is 4:5. What is the asset beta O a. 0.91 O b. 0.71 O c. 0.81 O d. 0.61
- Choose the correct letter of answer: The following data applies to a firm: Interest Charges P10 Million, Sales/CGS P80 Million, Tax Rate 50% and Net profit margin 10%. What is the firm's interest covered ration? a. 1.6b. 2.6c. 3.6d. 4.6e. 5.6Assume a firm increases its revenue by $148 while increasing its cost of goods sold by $117. How much additional tax will the firm owe if its marginal tax rate is 21%? Multiple Choice $6.51 $10.86 $17.11 $28.36Suppose Essen Corp has the following weights and costs. What is the WACC if the company has a 21% tax rate? Component Common equity Debt (before tax) R 11.5% 0.8 0.2 7.5% 10.39% ()8.71% ()6.25% 9.50% 10.70% Page 29 of 30 Previous Page Next Page
- As an Analyst you were tasked to compute for the Weighted Average Cost of Capital of variouscompanies given the following information. Income tax rate is 25% a. What is the cost of equity of each companies?b. What is the after tax cost of debt of each companies?c. What is the WACC of each companies? W Corp A Corp Co. Corp Ca Corp Risk Free rate 4.00% 3.00% 2.00% 3.50% Beta 1.25 % 1.50% 1.30% 1.40% Market Return 12.00% 11.00 % 10:00% 8:00% Debt to Equity Ratio 2.5 3 4 3.5 Credit Spread om BPS 200 300 250 150Use the following information for Cronos Group, Inc. (CRON): EBIT / Revenue 25.50% Government Tax Rate 42.50% Revenue / Assets 1.95 times Current Ratio 3.15 times EBT / EBIT 0.80 times Assets / Equity 2.00 times Its interest coverage ratio is closest to: A. 2.50. B. 5.00. C. 7.15. D. 9.25.If the state tax rate is 20% and the federal tax rate is 30%, what is the total effective tax rate? a. 34% b. 50% c. 44% d. 37% 2. Holding all other variables constant, which of the following would increase return on equity? An increase in _____________. a. the tax rate b. the equity ratio (equity/total assets) c. total assets d. total asset turnover
