4. Calculate the degree of financial leverage for a firm with EBIT of $6,000,000, fixed cost of $3,000,000, interest expense of $1,000,000, preferred stock dividends of 800,000, and a 40 percent tax...


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4. Calculate the degree of financial leverage for a firm with EBIT of $6,000,000, fixed cost of $3,000,000, interest expense of $1,000,000, preferred<br>stock dividends of 800,000, and a 40 percent tax rate<br>O 6.00<br>9.00<br>1.43<br>1.20<br>5. What is the current price of a share of stock when the current dividend is $4.75, the growth rate is 7 percent, and the investor's required rate of return is<br>11 percent?<br>$118.75<br>$43.16<br>$46.20<br>$127.06<br>6. The market value of Company T's equity is $15.0 million, and the market value of its risk-free debt is $5.0 million. If the required rate of return on the<br>equity is 20.0% and on the debt is 8.0%, calculate the company's cost of capital. (Assume no taxes)<br>17.00%<br>20.00%<br>8.10%<br>9.30%<br>

Extracted text: 4. Calculate the degree of financial leverage for a firm with EBIT of $6,000,000, fixed cost of $3,000,000, interest expense of $1,000,000, preferred stock dividends of 800,000, and a 40 percent tax rate O 6.00 9.00 1.43 1.20 5. What is the current price of a share of stock when the current dividend is $4.75, the growth rate is 7 percent, and the investor's required rate of return is 11 percent? $118.75 $43.16 $46.20 $127.06 6. The market value of Company T's equity is $15.0 million, and the market value of its risk-free debt is $5.0 million. If the required rate of return on the equity is 20.0% and on the debt is 8.0%, calculate the company's cost of capital. (Assume no taxes) 17.00% 20.00% 8.10% 9.30%

Jun 11, 2022
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