Baker Industries’ net income is $24,000, its interest expense is $5,000, and its tax rate is 35%. Its notes payable equals $25,000, long-term debt equals $70,000, and common equity equals $240,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm’s ROE and ROIC? Round your answers to two decimal places. Do not round intermediate calculations.
The firm’s ROI is computed as shown below:
= Net income / Common equity
= $ 24,000 / $ 240,000
= 10%
The firm’s ROIC is computed as shown below:
= EBIT ( 1 – tax rate ) / Total invested capital
EBIT is computed as follows:
= Net Income / 0.65 + Interest expenses
= $ 41,923.08 Approximately
Total Invested capital is compurted as follows:
= Notes payable + long term debt + common equity
= $ 25,000 + $ 70,000 + $ 240,000
= $ 335,000
So the firm’s ROIC will be:
= $ 41,923.08 ( 1 – 0.35 ) / $ 335,000
= 8.13% Approximately
Feel free to ask in case of any query relating to this question
Baker Industries’ net income is $24,000, its interest expense is $5,000, and its tax rate is...
Baker Industries’ net income is $24,000, its interest expense is $5,000, and its tax rate is 35%. Its notes payable equals $23,000, long-term debt equals $80,000, and common equity equals $240,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm’s ROE and ROIC? Do not round intermediate calculations. Round your answers to two decimal places. ROE % ROIC % Will you please show me step by step for ROIC please
Baker Industries’ net income is $23,000, its interest expense is $5,000, and its tax rate is 35%. Its notes payable equals $25,000, long-term debt equals $80,000, and common equity equals $250,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm’s ROE and ROIC? Round your answers to two decimal places. Do not round intermediate calculations.
Baker Industries’ net income is $25,000, its interest expense is $4,000, and its tax rate is 40%. Its notes payable equals $27,000, long-term debt equals $70,000, and common equity equals $255,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm’s ROE and ROIC? Round your answers to two decimal places. Do not round intermediate calculations. ROE % ROIC %
of Roe ROE AND ROIC Baker Industries' net income is $26,000, its interest expense is $5,000, and its tax rate is 35%. Its notes payable equals $25,000, long-term debt equals $75,000, and common equity equals $260,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm's ROE and ROIC? Round your answers to two decimal places. Do not round Intermediate calculations. ROE ROIC
Baker Industries' net income is $27,000, its interest expense is $5,000, and its tax rate is 25%. Its notes payable equals $26,000, long-term debt equals $75,000, and common equity equals $250,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm's ROE and ROIC? Do not round intermediate calculations. Round your answers to two decimal places. ROE: ROIC: %
Be eBook Baker Industries' net income is $23,000, its interest expense is $4,000, and its tax rate is 40%. Its notes payable equals $25,000, long-term debt equals $80,000, and common equity equals $240,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm's ROE and ROIC? Do not round intermediate calculations. Round your answers to two decimal places. ROE % ROIC 9
1. Baker Industries’ net income is $21,000, its interest expense is $6,000, and its tax rate is 25%. Its notes payable equals $25,000, long-term debt equals $70,000, and common equity equals $260,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm’s ROE and ROIC? Do not round intermediate calculations. Round your answers to two decimal places. 2.A firm has a profit margin of 5.5% and an equity multiplier of 2.8....
Baker Industries’ net income is $27,000, its interest expense is $4,000, and its tax rate is 45%. Its notes payable equals $25,000, long-term debt equals $75,000, and common equity equals $245,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm’s ROE and ROIC? Round your answers to two decimal places. Do not round intermediate calculation
Baker Industries’ net income is $26,000, its interest expense is $6,000, and its tax rate is 45%. Its notes payable equals $26,000, long-term debt equals $75,000, and common equity equals $250,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm’s ROE and ROIC? Round your answers to two decimal places. Do not round intermediate calculations.
Baker Industries' net income is $27000, its interest expense is $5000, and its tax rate is 45%. Its notes payable equals $26000, long-term debt equals $80000, and common equity equals $245000. The firm finances with only debt and common equity, so it has no preferred stock. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet What are the firm's ROE and ROIC?...