1. You have the following data on The Home Depot, Inc.
You also have the following market data:
Assume that if Home Depot issues new bonds, the bonds will have 10 years to maturity. What is the company’s return on assets?
Do not round at intermediate steps in your calculation. Express your answer in percent. Round to two decimal places. Do not type the % symbol.
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1. You have the following data on The Home Depot, Inc. Market value of long-term debt:...
You have the following data on The Home Depot, Inc. Market value of long-term debt: $20,888 million Market value of common stock: $171,138 million Beta: 1.04 Yield to maturity on debt with 10 years to maturity: 2.167% Expected return on equity: 8.076% Marginal tax rate: 35% Assume that if Home Depot issues new bonds, the bonds will have 10 years to maturity. Suppose that managers at Home Depot decide to increase the proportion of debt to 20% of the value...
For the most recent fiscal year, book value of long-term debt at Schlumberger was $10797 million. The market value of this long-term debt is approximately equal to its book value. Schlumberger’s share price currently is $44.11. The company has 1,000 million shares outstanding. Managers at Schlumberger estimate that the yield to maturity on any new bonds issued by the company will be 13.65%. Schlumberger’s marginal tax rate would be 35%. Schlumberger’s beta is 0.77. Suppose that the expected return on...
For the most recent fiscal year, book value of long-term debt at Schlumberger was $10,203 million. The market value of this long-term debt is approximately equal to its book value. Schlumberger’s share price currently is $41.5. The company has 1,000 million shares outstanding. Managers at Schlumberger estimate that the yield to maturity on any new bonds issued by the company will be 10.63%. Schlumberger’s marginal tax rate would be 35%. Schlumberger’s beta is 0.74. Suppose that the expected return on...
Hatter, Inc., has equity with a market value of $23.3 million and debt with a market value of $6.99 million. The cost of debt is 9 percent per year. Treasury bills that mature in one year yield 5 percent per year, and the expected return on the market portfolio over the next year is 12 percent. The beta of the company’s equity is 1.18. The firm pays no taxes. a. What is the company’s debt?equity ratio? (Do not round intermediate...
Edgehill, Inc. has 175,000 bonds outstanding. The bonds have a par value of $2,000, a coupon rate of 6.4 percent paid semiannually, and 10 years to maturity. The current YTM on the bonds is 6.2 percent. The company also has 10 million shares of stock outstanding, with a market price of $21 per share. What is the company’s market value debt-equity ratio? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)
Harris, Inc., has equity with a market value of $23.7 million and debt with a market value of $9.48 million. Treasury bills that mature in one year yield 6 percent per year and the expected return on the market portfolio is 11 percent. The beta of the company's equity is 1.22. The company pays no taxes. a. What is the company's debt-equity ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What...
Home Depot entered fiscal 2016 with a total capitalization of $27,252 million. In 2016, debt investors received interest income of $843 million. Net income to shareholders was $6,384 million. (Assume a tax rate of 35%.) Calculate the economic value added assuming its cost of capital is 10%. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)
Home Depot entered fiscal 2017 with a total capitalization of $21,895 million. In 2017, debt investors received interest income of $874 million. Net income to shareholders was $8,645 million. (Assume a tax rate of 21%.) Calculate the economic value added assuming its cost of capital is 10%. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)
Home Depot entered fiscal 2017 with a total capitalization of $21,886 million. In 2017, debt investors received interest income of $871 million. Net income to shareholders was $8,636 million. (Assume a tax rate of 21%.) Calculate the economic value added assuming its cost of capital is 10%. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)
Home Depot entered fiscal 2016 with a total capitalization of $27.273 millon In 2016, debt investors received interest income of $850 million. Net income to shareholders was $6.405 million. (Assume a tax rate of 35%) Calculate the economic value added assuming its cost of capital is 10%. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Economic value added million