Homework Answers
Interest tax shield = Interest expense * Tax Rate
Interest tax shield = $20,700,000 * 23%
Interest tax shield = $4,761,000
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Tatum Co. has a 23 percent tax rate. Its total interest payment for the year just...
Tatum Co. has a 25 percent tax rate. Its total interest payment for the year just...
Tatum Co. has a 25 percent tax rate. Its total interest payment for the year just ended was $30.3 million. What is the interest tax shield? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, and round your answer to the nearest whole number, e.g., 1,234,567.) Interest tax shield
Tatum Co. has a 22 percent tax rate. Its total interest payment for the year just...
Tatum Co. has a 22 percent tax rate. Its total interest payment for the year just ended was $23.9 million. What is the interest tax shield?
Bird Enterprises has no debt. Its current total value is $49.2 million. Assume debt proceeds are...
Bird Enterprises has no debt. Its current total value is $49.2 million. Assume debt proceeds are used to repurchase equity. a. Ignoring taxes, what will the company’s value be if it sells $19.5 million in debt? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, round your answer to the nearest whole number, e.g., 1,234,567.) b. Suppose now that the company’s tax rate is 21 percent. What will its overall value be if it...
The Collins Co. has just gone public. Under a firm commitment agreement, the company received $32.70...
The Collins Co. has just gone public. Under a firm commitment agreement, the company received $32.70 for each of the 4.17 million shares sold. The initial offering price was $35.10 per share, and the stock rose to $42.40 per share in the first few minutes of trading. The company paid $912,000 in legal and other direct costs and $264,000 in indirect costs. What is the net amount raised? (Do not round intermediate calculations. Enter your answer in dollars, not millions...
Three Piggies Enterprises has no debt. Its current total value is $76.8 million. Assume debt proceeds...
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Three Piggies Enterprises has no debt. Its current total value is $72 million. Assume debt proceeds...
Three Piggies Enterprises has no debt. Its current total value is $72 million. Assume debt proceeds are used to repurchase equity. Ignoring taxes, what will the company’s value be if it sells $33 million in debt? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Round your answer to the nearest whole number, e.g., 32.) Value of the firm $ Suppose now that the company’s tax rate is 32 percent. What will...
Bird Enterprises has no debt. Its current total value is $49.4 million. Assume debt proceeds are...
Bird Enterprises has no debt. Its current total value is $49.4 million. Assume debt proceeds are used to repurchase equity. a. Ignoring taxes, what will the company’s value be if it sells $19.6 million in debt? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, round your answer to the nearest whole number, e.g., 1,234,567.) b. Suppose now that the company’s tax rate is 22 percent. What will its overall value be if it...
Bird Enterprises has no debt. Its current total value is $48.4 million. Assume debt proceeds are...
Bird Enterprises has no debt. Its current total value is $48.4 million. Assume debt proceeds are used to repurchase equity. a. Ignoring taxes, what will the company's value be if it sells $19.1 million in debt? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, round your answer to the nearest whole number, e.g., 1,234,567.) b. Suppose now that the company's tax rate is 22 percent. What will its overall value be if it...
During the year, the Senbet Discount Tire Company had gross sales of $1.12 million. The company's...
During the year, the Senbet Discount Tire Company had gross sales of $1.12 million. The company's cost of goods sold and selling expenses were $531,000 and $221,000, respectively. The company also had debt of $860,000, which carried an interest rate of 6 percent. Depreciation was $136,000. The tax rate was 40 percent. a. What was the company's net income? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Round your answer to the...
During the year, the Senbet Discount Tire Company had gross sales of $1.12 million. The company's...
During the year, the Senbet Discount Tire Company had gross sales of $1.12 million. The company's cost of goods sold and selling expenses were $531,000 and $221,000, respectively. The company also had debt of $860,000, which carried an interest rate of 6 percent. Depreciation was $136,000. The tax rate was 40 percent. a. What was the company's net income? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Round your answer to the...
Tatum Co. has a 25 percent tax rate. Its total interest payment for the year just ended was $30.3 million. What is the interest tax shield? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, and round your answer to the nearest whole number, e.g., 1,234,567.) Interest tax shield
The Collins Co. has just gone public. Under a firm commitment agreement, the company received $32.70 for each of the 4.17 million shares sold. The initial offering price was $35.10 per share, and the stock rose to $42.40 per share in the first few minutes of trading. The company paid $912,000 in legal and other direct costs and $264,000 in indirect costs. What is the net amount raised? (Do not round intermediate calculations. Enter your answer in dollars, not millions...
Bird Enterprises has no debt. Its current total value is $48.4 million. Assume debt proceeds are used to repurchase equity. a. Ignoring taxes, what will the company's value be if it sells $19.1 million in debt? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, round your answer to the nearest whole number, e.g., 1,234,567.) b. Suppose now that the company's tax rate is 22 percent. What will its overall value be if it...
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