What are its tie ratio and return on invested capital

Assignment Help Financial Management

Reference no: EM13933434

The H.R. Pickett Corp. has $500,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 10%. In addition, it has $700,000 of common stock on its balance sheet. It finances with only debt and common equity, so it has no preferred stock. Its annual sales are $2.7 million, its average tax rate is 30%, and its profit margin is 8%. What are its TIE ratio and its return on invested capital (ROIC)? Round your answers to two decimal places.

TIE x

ROIC %

Reference no: EM13933434

Questions Cloud

Improvement of oil infrastructures : The near $100 oil price a barrel has enormously affected the U.S economy and has resulted from improvement of oil infrastructures. There has been a 9 percent or more oil contracts rise since January.

How a person might incorporate social cognition into future : A brief explanation of two ways to use social cognition to promote social change. Then, explain how a person might incorporate social cognition into their future practice or research.

The value of the hardware division : The risk-free rate of interest is 3% and the market risk premium is 5%. Alpha Company’s hardware division has an asset beta of 1.4, a free cash flow of $450 million, and an expected growth rate of 4.0%. The value of the hardware division (in $million..

What is the theoretical price of strike call : AIG stock sells at $61.21 and the 6-month 60-strike put is selling at $3.20. The risk-free rate is 4% and the stock will pay a dividend of $0.30 in 3 months. We assume that all options are European-style. What is the theoretical price of the 6-month ..

What are its tie ratio and return on invested capital : The H.R. Pickett Corp. has $500,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 10%. In addition, it has $700,000 of common stock on its balance sheet. It finances with only debt and common equity, so it has no prefer..

Prepare a trial balance to prove the equality : Prepare a trial balance to prove the equality of debits and credits.

Find the constant of integration : Find the constant of integration, C if: y = ò (9x2 + 2x - 9)dx and the curve passes through the point (2, 4)

What is its times-interest-earned ratio : Graser Trucking has $19 billion in assets, and its tax rate is 35%. Its basic earning power (BEP) ratio is 19%, and its return on assets (ROA) is 5%. What is its times-interest-earned (TIE) ratio?

Effect of placing an excise tax on cigarettes : Show the effect of placing an excise tax on cigarettes, mark clearly the price paid by consumers as Pc and the price received by producers as Py.

User Account

All Pages