Please help me understand this scenario: 1. How can Bank X reduce its WACC? 2. How...
Please help me understand this scenario:
1. How can Bank X reduce its WACC?
2. How do I solve for EBT (Earnings before taxes) for the
following hypothetical financial firm given the following
information:
Tax rate = 25%
Net income = $12 million.
Also, if EBIT (Earnings before interest and taxes) = $21 million,
what would the interest expense equal?
Homework Answers
(2) Tax Rate = 25 %,Net Income = $ 12 million,
EBT (Earnings Before Tax) = Net Income / (1-Tax Rate) = 12 / (1-0.25) = $ 16 million
EBIT = EBT + Interest Expense
Interest Expense = EBIT - EBT = 21 - 12 = $ 9 million
Add Answer to:
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