The company has three divisions: A, B, and C. The tax rate is 20%. The overall Beta, divisional Beta, asset value, and D/E ratios are given in the following table. What is the Beta of division C? Beta D/E Asset Value 0.6 $100 M $40 M $35 M FINA 1.5 Division A 1.8 Division B 1.4 Division C? 0.4 0.4 0.25

The company has three divisions: A, B, and C. The tax rate is 20%. The overall Beta, divisional Beta, asset value, and D/E ratios are given in the following table. What is the Beta of division C? Beta D/E Asset Value 0.6 $100 M $40 M $35 M FINA 1.5 Division A 1.8 Division B 1.4 Division C? 0.4 0.4 0.25

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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XYZ Company has two divisions, A and B. Information for each division is as follows: Net earnings for division Asset base for division Target rate of return Margin Weighted average cost of capital What is the total sales amount for B? 1. P666,667 2. P800,000 3. P1,300,000 4. P1,200,000 A P 40,000 P100,000 15% 10% 12% B P 260,000 P1,200,000 18% 20% 12%
Calculate the sales margin, asset turnover, and ROA for the companies below: Average Capital Assets Company A B Net Income Sales 350,000 5,500,000 12,000,000 .06 845,000 9,350,000 13,500,000 Sales Margin 1 Asset Turnover 2.9 1.44 Note: Please write the sales Margin and ROI as a percentage or as a decimal rounded to two places behind the decimal point. ROI 6,500,000 4,150,000
Assuming Sunny-D Cafe has a tax rate of 30 percent, calculate sales for the firm given the following financial information: net income of $37,900; interest expense of $11,500; depreciation expense of $14,200; and costs of $80,900. Points: 1 A. $144,500 B. $154,143 C. $160,743 D. $165,114 E. Remember to breathe
The following results are available for Division X and Y:Division X Division YProfit before interest and tax P185 000 P172, 000Capital employed P1, 540, 000 P1, 650, 000The cost of capital is 10%.Calculate and comment on the performance of the departments based on:a. Return on capital employed (4 marks)b. Residual incom
Briggs Company has operating income of $45,760, invested assets of $143,000, and sales of $457,600. Use the DuPont formula to compute the return on investment. If required, round your answers to two decimal places. a. Profit margin % b. Investment turnover c. Return on investment %
Use the following information for Smith Brothers, Inc: EBIT / Revenue 15.00% Government Tax Rate 35.00% Revenue / Assets 1.80 times Current Ratio 2.40 times EBT / EBIT 0.80 times Assets / Equity 1.90 times Smith Brothers, Inc.'s return on assets (ROA) is closest to: A. 14.04%. B. 14.82%. C. 24.71%. D. 26.68%.
The following data are available for X Corp:Gross profit is 20% based on cost. Using ABC, compute the selling price of each unit of Product B?
The northern division of Aussie Estates has reported a profit of $4 million. Divisional invested capital is $2.5 million and the imputed interest rate is 12 per cent. What is the residual income? a.$3.70 million b.$3.52 million c.$1.50 million d.$2.02 million
Below is given the data for the assembly division of Charles Corporation: Sales Cost of Sales Operating Expenses $10,000,000 $15,000,000 Average Operating Assets $250,000,000 $310,000,000 2020 2021 $100,000,000 $165,000,000 $22,000,000 $28,000,000 Minimum Required Rate of Return Actual Cost of Capital Income Tax Rate Instructions 1. Compute the margin and turnover ratios for each year 2. Compute the ROI for each year 3. Compute the residual income for each year 4. Compute EVA for Charles Corporation for each year (Note: Round to 2 decimal) MacBook Air 9% 6% 30%
2. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment for each division. Round percentages to one decimal place and the investment turnover to two decimal places.
The following are selected data for the division for the consumer products of ABC Corp for 2020: Sales P 10,000,000 Average invested capital 4,000,000 Net Income 400,000 Cost of Capital 8% What is the asset turn-over ratio for the division? 1. .25 times 2. 2.5 times 3. 8 times 4. 10% O 1 O 2 O 3 O 4
Data for the wholesale products division of ABC Co. are as follows: Earnings before interest and taxes P30,000,000; Depreciation expense P10,000,000; Interest Expense P1,000,000; Change in net working capital P5,000,000; Capital expenditures P4,000,000; Invested capital P50,000,000; Weighted average cost of capital 10%; Tax rate 30%. Considering the impact of income tax, the economic value added by the division must be nearest to P15,300,000 P16,000,000 P16,300,000 P25,000,000 P30,000,000

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