What will be the company return on equity

Reference no: EM13302551

Midwest packaging's ROE last year was only 3%, but its management has developed a new operating plan that calls for a debt-to-asset ratio of 60%, which will result in annual interest charges of 300,000. The firm has no plans to use preferred stock. Management projects an EBIT of 1,000,000 on sales of 10,000,000 and it expects to have a total assets turnover ratio of 2.0, under these conditions, the tax rate will be 34%. If the changes are made, what will be the company's return on equity?

Reference no: EM13302551

Questions Cloud

Determine the weight of the water and the pressure forces : A 30-ft-high, 1-ft-diameter pipe is welded to the top of a cubic container 13 ft * 3 ft * 3 ft2. The container and pipe are filled with water at 20°C. Determine the weight of the water and the pressure forces on the bottom and sides of the contain..

Determine the annual effective interest rate : Marilyn invests $3,500 at time 0 in order to receive payments of $450 at times 1 year, 2 years, 3 years, and so on, with the last payment at time 10 years. Determine the annual effective interest rate that Marilyn earns.

How many ads of each type should be placed : How many ads of each type should be placed?

Determine what is the permeability of the soil : The Permeability of a semi-impervious soil was evaluated in a falling-head permeameter whose head decreased from 40 to 15 inches in 5min. The body diameter was 0.1 inch, and the sample length and diameter was 2 inches.

What will be the company return on equity : Management projects an EBIT of 1,000,000 on sales of 10,000,000 and it expects to have a total assets turnover ratio of 2.0, under these conditions, the tax rate will be 34%. If the changes are made, what will be the company's return on equity?

Determine the value of the dynamic viscosity at conditions : Start from the values for the density and the kinematic viscosity of CO2 at 15o C and standard atmospheric pressure (101.3 kPa), and first determine the value of the dynamic viscosity at the same conditions.

Determine effective annual interest rate for a nominal rate : Determine the effective annual interest rate for a nominal rate of 8% per year, in which is compounded quarterly.

What is its linear speed at the bottom of the incline : A spherical object with a moment of inertia of 0.482mr2 starts from rest rolling down a 3.14-m high incline. what is its linear speed at the bottom of the incline

Determine a dollar amount on december 31st-2011 : determine a dollar amount on December 31st , 2011 FOR $1000 equal payments made at the end of each of the previous 7 years including the current year. use an effective interest rate of 10% compounded annually.

User Account

All Pages