Firm finances with only debt and common equity

Assignment Help Financial Management

Reference no: EM131825450

Baker Industries’ net income is $23,000, its interest expense is $4,000, and its tax rate is 35%. Its notes payable equals $27,000, long-term debt equals $70,000, 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 calculations.?

Reference no: EM131825450

Questions Cloud

The firm will finance using only debt and common equity : If it chooses to use debt, the firm will finance using only debt and common equity, so no preferred stock will be used.

What are tie ratio and return on invested capital : What are its TIE ratio and its return on invested capital (ROIC)?

Statements related to modern portfolio theory : Consider the following statements related to modern portfolio theory. For each of the following statements indicate whether the statement is true or false

Calculate the price of share of the company common stock : Calculate the price of a share of the company's common stock.

Firm finances with only debt and common equity : The firm finances with only debt and common equity, so it has no preferred stock. What are the firm’s ROE and ROIC?

Other transaction costs or finance charges : There were no other transaction costs or finance charges. How much will Mike’s balloon payment be in eight years?

What is debt-to-capital ratio : The firm's total capital is $115 million and it finances with only debt and common equity. What is its debt-to-capital ratio?

Social causes and still maximized shareholder wealth : Are there ways that Ben & Jerry’s could have simultaneously pursued their social causes and still maximized shareholder wealth?

Assuming the firm uses only debt and common equity : Calculate Caulder's profit margin assuming the firm uses only debt and common equity, so total assets equal total invested capital.

User Account

All Pages