Adjusted WACC. Lewis runs an outdoor adventure company and wants to know what effect a tax change will have on his company's WACC. Currently, Lewis has the following financing pattern Equity: 35% and cost of 14.00% Preferred stock: 15% and cost of 11.00% Debt: 50% and cost of 10.0% before taxes What is the adjusted WACC for Lewis if the tax rate is a. 40%? b. 30%? c. 20%? d. 10%? e. 0%?
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- Adjusted WACC. Lewis runs an outdoor adventure company and wants to know what effect a tax change will have on his company's WACC. Currently, Lewis has the following financing pattern: Equity: 36% and cost of 18.17% Preferred stock: 15% and cost of 11.88% Debt: 49% and cost of 10.8% before taxes What is the adjusted WACC for Lewis if the tax rate is a. 40%? b. 25%? с. 20%? d. 10%? е. 0%? ..... a. What is the adjusted WACC for Lewis if the tax rate is 40%? |% (Round to two decimal places.)7. Consider the following income tax rate structure. Rate Income bracket Up to $50,000 $50,001 to $150,000 + 20% $150,001 and above Suppose Ms. James's annual income is $140,000 as a director in the Education Research Inc. She was offered a job as a managing director in the Advanced Research & Co., which would provide annual income of $165,000. What would be additional tax liability if she accepts the offer? A) $3,000 B) $4,000 C) $5,000 D) $3,500 5% + 10%If the state tax rate is 20% and the federal tax rate is 30%, what is the total effective tax rate? a. 34% b. 50% c. 44% d. 37% 2. Holding all other variables constant, which of the following would increase return on equity? An increase in _____________. a. the tax rate b. the equity ratio (equity/total assets) c. total assets d. total asset turnover
- Use the following information about Red Rocks Inc. to answer the following question: Assume the following: Pays no taxes Return on net operating assets (RNOA) = 18% %3D Has $2,000 in net operating assets financed by equity At the beg. of the year borrows $1000 at 8%. Uses debt to buy additional operating assets. What is the return on equity (ROE) for Red Rocks? Edit View Insert Format Tools Table 12pt v Paragraph v B IU A e T?v I.Rhodes Corporations financial statements are shown after part f. Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions. a. What is the net operating profit after taxes (NOPAT) for 2020? b. What are the amounts of net operating working capital for both years? c. What are the amounts of total net operating capital for both years? d. What is the free cash flow for 2020? e. What is the ROIC for 2020? f. How much of the FCF did Rhodes use for each of the following purposes: after-tax interest, net debt repayments, dividends, net stock repurchases, and net purchases of short-term investments? (Hint: Remember that a net use can be negative.) Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)(Corporate income tax) Meyer Inc. has taxable income (earnings before taxes) of $300,000. Calculate Meyer's federal income tax liability using the tax table shown in the popup window: What are the firm's average and marginal tax rates? The firm's tax liability for the year is $. (Round to the nearest dollar.) Etext pages 2 W S mmand X Get more help # 3 80 F3 E D C $ 4 ODD 988 R F % 5 V FS T G 6 B MacBook Air F6 Y H & 7 F7 U N * 8 J PIL 1 M ( 9 K MOSISO DD F9 O ; FW1 { + [ option ? "1 1 Question Viewer 41 FYZ } delete return
- Proposed Regressive Plan (Regressive Tax) Calculate the tax for $95,000 . For example, $10,000x40%=$4,000 in tax. Show your work!! 40% on income up to $25,000 30% on income between $25,000 and $34,000 25% on income between $34,000 and $44,000 20% on income between $44,000 and $80,000 10% on taxable income over $80,000 TOTAL TAX PAID (sum of all rows):14. You are an employee of a consultant company and have been given the following information to do an investment analysis of a new small income-producing property for sale to a potential investor. What is the before tax NPV using a 15% equity discount rate? (round your final answer to whole numbers) Asking Price Rent Year 1 Growth Rent Vacancy and Coll Loss Expenses LTV Loan Interest Loan Term Payments Per Year Property Appreciation Rate Holding Period Selling Costs Equity Discount Rate $2,000,000 $250,000 2.50% Equity Loan 10% 40% 70% 6% 30 12 3% 5 0% 15% of rents of EGI $600,000 $1,400,000 years The above information results in the following investment analysis. years of sale priceWhat is the investment objective for a client who is 57 years old and planning to retire in 5 years? Select one: O a Preservation of capital and income. b. Growth. O c Developing a savings plan. Od. Preservation of capital. A PPN is issued with a NAV of $22.00, and is redeemed at $28 a month before maturity. Calculate the amount of tax per unit tha an investor in a 30% marginal tax bracket will owe at redemption. Select one: O a $0.90 Ob. $1.20 Oe $1.80 Od. $0.60 Which of the following institutions are not buy-side institutions? Select one: O a Trusts O b. Endowments Oc. Pension funds Od. Full-service dealers
- How to find ths using a Financial calculator!! Suppose that Glamour Nails, Inc.'s capital structure features 40 percent equity, 60 percent debt, and that its before-tax cost of debt is 5 percent, while its cost of equity is 12 percent. If the appropriate weighted average tax rate is 40 percent, what will be Glamour Nails' WACC? 4.78 percent 4.85 percent 6.60 percent 7.00 percent(a). An investor who is in the 28 % tax bracket is considering choosing between an investment earning a 6 % taxable return and an investment earning a 4 % tax-free yield. Advise the investor which investment he should choose and give reasons. (b) If you buy 100 common shares of ZANACO Plc, to what are you entitled? (c) What is the most money you could make over the next year? (d) If you pay K95 per share, what is the most money you could lose over the year? (e) Stock Initial Price Final Price Shares (millions) ABC K25 K30 20 XYZ K100 K90 1 (1) Determine the portfolio initial…An overview of a firm's cost of debt For which capital component must you make a tax adjustment when calculating a firm’s weighted average cost of capital (WACC)? Pick the correct choice. A- Preferred stock B- Equity C- Debt Three Waters Company (TWC) can borrow funds at an interest rate of 12.50% for a period of five years. Its marginal federal-plus-state tax rate is 45%. TWC’s after-tax cost of debt is_________% (rounded to two decimal places). At the present time, Three Waters Company (TWC) has 15-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a current market price of $1,136.50 per bond, carry a coupon rate of 12%, and distribute annual coupon payments. The company incurs a federal-plus-state tax rate of 45%. If TWC wants to issue new debt, what would be a reasonable estimate for its after-tax cost of debt (rounded to two decimal places)? Pick the correct choice. 5.60% 5.04%…