Longterm financing is perfectly matched with long-term asset

Assignment Help Financial Management
Reference no: EM131532437

Colter Steel has $4,600,000 in assets.

Temporary current assets $ 1,200,000

Permanent current assets 1,510,000

Fixed assets1,890,000

Total assets$ 4,600,000

Short-term rates are 8 percent. Long-term rates are 13 percent. Earnings before interest and taxes are $980,000. The tax rate is 30 percent.

If long-term financing is perfectly matched (synchronized) with long-term asset needs, and the same is true of short-term financing, what will earnings after taxes be?

Earnings after taxes_________________ $

Reference no: EM131532437

Questions Cloud

Risk-free monthly lease rate for four-year lease in perfect : What is the risk-free monthly lease rate for a 4-year lease in a perfect market? The risk-free monthly lease rate for a 4-year lease in a perfect market is
What is the company unlevered cost of equity capital : What is the company’s cost of equity capital? What is the company’s unlevered cost of equity capital?
The present value of the lease payments : The present value of the lease payments is. The? risk-free monthly lease rate for a 4?-year lease in a perfect market is_____
Define a discrete-time signal using the given formula : Design an IIR filter that will synthesize y[n]. Give your answer in the form of a difference equation with numerical values for the coefficients.
Longterm financing is perfectly matched with long-term asset : If long-term financing is perfectly matched (synchronized) with long-term asset needs and same is true of short-term financing, what will earnings after taxes
What is effective annual interest rate being charged by bank : what is the effective annual interest rate being charged by the? bank?
What is expected level of sales for the next year : What is the expected level of sales for the next year?
How much external financing will firm have to seek : How much external financing will the firm have to seek? Assume there is no increase in liabilities other than that which will occur with the external financing.
Economy probability of states percentage returns economic : State of the economy Probability of the states Percentage returns Economic recession 17% -4.2% Steady economic growth 48% 3.8% Boom.

Reviews

Write a Review

Financial Management Questions & Answers

  Global manufacturer of electrical switching equipment

A global manufacturer of electrical switching equipment? (ESE) is considering outsourcing the manufacturing of an electrical breaker used in the manufacturing of switch boards. How many breakers would the electrical switching equipment company need p..

  Market-to-book ratio

Dudley Hill Golf Club's market-to-book ratio is currently 2.1 times and the PE ratio is 6.55 times. Dudley Hill Golf Club's common stock is currently selling at $18.06 per share. What is the book value per share? What is the earnings per share?

  General cash offering to raise needed funds

The Elkmont Corporation needs to raise $51.4 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is $30 per share and the company’s under..

  General cash offering to raise the needed funds

The Elkmont Corporation needs to raise $52.5 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is $41 per share and the company’s under..

  An amount p must be invested now to allow withdrawals

An amount, P, must be invested now to allow withdrawals of $1,000 per year for the next 15 years and to permit $320 to be withdrawn starting at the end of year 5 and continuing over the remainder of the 15-year period as the $320 increases by 4% per ..

  Using the discounted cash flow model presented in exhibit

Using the discounted cash flow model presented in Exhibit B, what do you think Elan is worth?

  What is the apparent interest rate

What is the apparent interest rate?

  Non-standard bond to raise capital

Standard Oil issued a non-standard bond to raise capital in the following way. At the bond’s maturity the company promised to pay $1,000 plus an additional amount based on the price of oil at that time. What are the two option positions required to r..

  Dequate compensation for this investment

You are considering the purchase of Crown Bakery, Inc. common stock that just paid a dividend od $19.59 per share. You expect the dividend to grow at a rate of 1.04 percent per year, indefinitely. You estimate the rate of return od 12.18%, will be ad..

  Claims that all financial crises involve bank runs

Gorton claims that all financial crises involve bank runs. An example of this is that interbank loans among domestically chartered commercial banks (interbank loans, domestically chartered commercial banks, seasonally adjusted (H8/H8/B1045NDMAM) fell..

  What is the probability of financing with the british pound

What is the probability of financing with the British pound will be less expensive.

  Economists draw from breakdown of the bretton woods system

Why was the foundation of the Bretton Woods system, and why did it eventually fail? What lessons can economists draw from the breakdown of the Bretton Woods sys

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd