Question

Barton Industries has operating income for the year of $3,000,000 and a 38% tax rate. Its...

Barton Industries has operating income for the year of $3,000,000 and a 38% tax rate. Its total invested capital is $20,000,000 and its after-tax percentage cost of capital is 6%. What is the firm's EVA? Round your answer to the nearest dollar, if necessary.

Homework Answers

Answer #1

Please upvote if the answer is helpful.In case of doubt,do comment.Thanks.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Last year Miami Rivet had $5 million in operating income (EBIT). Its depreciation expense was $1...
Last year Miami Rivet had $5 million in operating income (EBIT). Its depreciation expense was $1 million, its interest expense was $1 million, and its corporate tax rate was 25%. At year-end, it had $14 million in operating current assets, $3 million in accounts payable, $1 million in accruals, $2 million in notes payable, and $15 million in net plant and equipment. Assume Miami Rivet has no excess cash. Miami Rivet uses only debt and common equity to fund its...
For 2019, Gourmet Kitchen Products reported $23.5 million of sales and $18 million of operating costs...
For 2019, Gourmet Kitchen Products reported $23.5 million of sales and $18 million of operating costs (including depreciation). The company has $14 million of total invested capital. Its after-tax cost of capital is 8% and its federal-plus-state income tax rate was 25%. What was the firm's economic value added (EVA), that is, how much value did management add to stockholders' wealth during 2019? Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer...
Quantitative Problem: 5 years ago, Barton Industries issued 25-year noncallable, semiannual bonds with a $1,300 face...
Quantitative Problem: 5 years ago, Barton Industries issued 25-year noncallable, semiannual bonds with a $1,300 face value and a 5% coupon, semiannual payment ($32.5 payment every 6 months). The bonds currently sell for $845.87. If the firm's marginal tax rate is 40%, what is the firm's after-tax cost of debt? Round your answer to 2 decimal places. Do not round intermediate calculations. % Barton Industries can issue perpetual preferred stock at a price of $47 per share. The stock would...
5 years ago, Barton Industries issued 25-year noncallable, semiannual bonds with a $1,000 face value and...
5 years ago, Barton Industries issued 25-year noncallable, semiannual bonds with a $1,000 face value and an 8% coupon, semiannual payment ($40 payment every 6 months). The bonds currently sell for $847.87. If the firm's marginal tax rate is 25%, what is the firm's after-tax cost of debt? Do not round intermediate calculations. Round your answer to two decimal places.
5 years ago, Barton Industries issued 25-year noncallable, semiannual bonds with a $1,100 face value and...
5 years ago, Barton Industries issued 25-year noncallable, semiannual bonds with a $1,100 face value and a 8% coupon, semiannual payment ($44 payment every 6 months). The bonds currently sell for $845.87. If the firm's marginal tax rate is 40%, what is the firm's after-tax cost of debt? Round your answer to 2 decimal places. Do not round intermediate calculations.
Quantitative Problem: 5 years ago, Barton Industries issued 25-year noncallable, semiannual bonds with a $2,000 face...
Quantitative Problem: 5 years ago, Barton Industries issued 25-year noncallable, semiannual bonds with a $2,000 face value and a 6% coupon, semiannual payment ($60 payment every 6 months). The bonds currently sell for $845.87. If the firm's marginal tax rate is 40%, what is the firm's after-tax cost of debt? Round your answer to 2 decimal places. Do not round intermediate calculations. %
Barton Industries expects that its target capital structure for raising funds in the future for its...
Barton Industries expects that its target capital structure for raising funds in the future for its capital budget will consist of 40% debt, 5% preferred stock, and 55% common equity. Note that the firm's marginal tax rate is 40%. Assume that the firm's cost of debt, rd, is 8.3%, the firm's cost of preferred stock, rp, is 7.8% and the firm's cost of equity is 12.3% for old equity, rs, and 12.94% for new equity, re. What is the firm's...
Barton Industries expects that its target capital structure for raising funds in the future for its...
Barton Industries expects that its target capital structure for raising funds in the future for its capital budget will consist of 40% debt, 5% preferred stock, and 55% common equity. Note that the firm's marginal tax rate is 25%. Assume that the firm's cost of debt, rd, is 9.1%, the firm's cost of preferred stock, rp, is 8.3% and the firm's cost of equity is 11.7% for old equity, rs, and 12.2% for new equity, re. What is the firm's...
Quantitative Problem: Barton Industries expects that its target capital structure for raising funds in the future...
Quantitative Problem: Barton Industries expects that its target capital structure for raising funds in the future for its capital budget will consist of 40% debt, 5% preferred stock, and 55% common equity. Note that the firm's marginal tax rate is 25%. Assume that the firm's cost of debt, rd, is 9.1%, the firm's cost of preferred stock, rp, is 8.3% and the firm's cost of equity is 11.7% for old equity, rs, and 12.2% for new equity, re. What is...
Assume today is December 31, 2013. Barrington Industries expects that its 2014 after-tax operating income [EBIT(1...
Assume today is December 31, 2013. Barrington Industries expects that its 2014 after-tax operating income [EBIT(1 – T)] will be $440 million and its 2014 depreciation expense will be $60 million. Barrington's 2014 gross capital expenditures are expected to be $110 million and the change in its net operating working capital for 2014 will be $25 million. The firm's free cash flow is expected to grow at a constant rate of 5.5% annually. Assume that its free cash flow occurs...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT