Debt-to-equity ratio and income tax rate

Assignment Help Financial Management

Reference no: EM13925373

For Florianópolis Corporation debt-to-equity ratio, income tax rate, and dividend payout ratio are all 30%. The cost of debt is 11%. Florianópolis has 2 million shares of common stock, and $27 million in long-term bonds. Its dividend is $1.20 per share. Find the EBIT and the price per share for Florianópolis. Show solutions.

Reference no: EM13925373

Questions Cloud

Nonlinear breakeven analysis : International Data Systems information on revenue and costs is only relevant up to a sales volume of 105,000 units. After 105,000 units, the market becomes saturated and the price per unit falls from $14.00 to $8.80. Compute operating income at 105,0..

Estimate cost of capital : Cost of Capital Blues, Inc., is an MNC located in the United States. Blues would like to estimate its cost of capital (WACC). On average, bonds issued by Blues yield 9 percent. Currently, Treasury security rates are 3 percent. Furthermore, Blues' ..

Debt-to-assets ratio-accomplish the financial restructuring : Recife Inc. has debt-to-assets ratio of 35%, tax rate of 40%, and total value of $200 million. William J. Recife, the CFO, would like to increase the leverage ratio to 39%, and he believes that there will be no change in the bankruptcy cost of the co..

What is palindromic function : Use a direct method to prove that for any string x, xxR is palindromic.

Debt-to-equity ratio and income tax rate : For Florianópolis Corporation debt-to-equity ratio, income tax rate, and dividend payout ratio are all 30%. The cost of debt is 11%. Florianópolis has 2 million shares of common stock, and $27 million in long-term bonds. Its dividend is $1.20 per sha..

Suppliers of component parts : The President of EEC recently called a meeting to announce that one of the firm's largest suppliers of component parts has approached EEC about a possible purchase of the supplier. The President has requested that you and your staff analyse the fe..

Sinking fund and preferred dividends-out of current income : Goiânia Corporation is expecting to have EBIT next year of $11 million, with a standard deviation of $7 million. Goiânia has $35 million in bonds with coupon of 8%, selling at par, which are being retired at the rate of $2.5 million annually. Calcula..

How much value can you add : You forecast 14 percent benchmark volatility, the recent average, but unfortunately benchmark volatility turns out to be 17 percent. How much value can you add, given this misestimation of benchmark volatility?

Financially accountable for their operations : According to GASB Statement No. 44, all of the following is a recommendation category for the CAFR's statistical section EXCEPT

User Account

All Pages