Tie ratio and its return on invested

Assignment Help Finance Basics
Reference no: EM131209386

The W.C. Pruett Corp. has $300,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 11%. In addition, it has $600,000 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 $0.81 million, its average tax rate is 30%, and its profit margin is 6%. What are its TIE ratio and its return on invested capital (ROIC)?

Reference no: EM131209386

Questions Cloud

List two services that fis provide to the public : List two services that FIs provide to the public. - Why do intermediaries provide these ser vices? What is a contingent financial claim?
Explain how seemingly contradictory statement can be true : "With financial intermediation, net lenders can earn a higher return on their surplus funds, and net borrowers can acquire funds at a lower cost."
Discuss the significance of orwells novel animal farm : Discuss the significance of Orwells novel ANIMAL FARM - Describe the fiasco of Charlie's funeral? What does this further tell us about the Stasi?
Apply fraud triangle model to discuss the world-com fraud : OMBA 6315 Ethics Essay Assignment. Apply the fraud triangle model to discuss the World-Com Fraud and briefly discuss how Gebler's approach to "Creating An Ethical Culture" could have made a difference for Betty Vinson. You are limited to 400 words..
Tie ratio and its return on invested : It finances with only debt and common equity, so it has no preferred stock. Its annual sales are $0.81 million, its average tax rate is 30%, and its profit margin is 6%. What are its TIE ratio and its return on invested capital (ROIC)?
How much money do you have in the account : You just discovered that your spouse knew about the account the whole time and has been withdrawing $45 each month for the last 10 years. How much money do you have in the account?
Maximum allowable payback : Compute the payback period statistic for the following project and recommend whether the firm should accept or reject the project with the cash flow shown in the chart if the maximum allowable payback is 4 years
What would happen to interest rates on municipal securities : What would happen to interest rates on municipal securities, given each of the following scenarios?-  The government increases marginal tax rates.
Journalize the entries to record the operations : Journalize the entries to record the operations, identifying each entry by letter. For a compound transaction, if an amount box does not require an entry, leave it blank.

Reviews

Write a Review

Finance Basics Questions & Answers

  Identify an incentive conflict in your firm

Identify an incentive conflict in your firm, or one you have read about, that reduced firm value. As part of your answer discuss whether or not one or more of the legs of the organizational stool was unbalanced, and if so, how that contributed to ..

  Fondren machine tools has total assets of 3850000 and

fondren machine tools has total assets of 3850000 and current assets of 856000. it turns over its fixed assets 1.9

  A company''s defined benefit pension plan

A company's defined benefit pension plan utilizes a funding formula that considers years of service and average compensation to determine the pension benefit payable to the plan participants. If Kim is a participant in this defined benefit pension pl..

  Computing the number of patients

Rotary Hospital's static nursing labour expense budget for the month of November 2012 was $64,800 (1,200 patients * 1.5 nursing labour hours per patient * $36 per nursing labour hour).

  Joker stock has a sustainable growth rate of 8 percent roe

joker stock has a sustainable growth rate of 8 percent roe of 18 percent and dividends per share of 3.35. if the pe

  Which of the following did not result from the

which of the following did notresult from the sarbanes-oxley act?a top management must now certify the accuracy of

  Computation of risk free rate of return

Computation of Risk free rate of return and Suppose that securities A and B are perfectly negatively correlated

  What is the amount a person would have to deposit today

What is the amount a person would have to deposit today to be able to take out $5000 a year for 10 years from an account earning 8 percent annually?

  Future value than an ordinary annuity

Why does an annuity due always have a higher future value than an ordinary annuity? Use a specific example to support your response.

  A financial manager is trying to decide whether to use edt

a financial manager is attempting to decide whether to use edt or wire transfer but must first calculate the minimum

  What is the amount of the collection float

Every day, the firm mails out checks totaling $4,400 that generally take 3 days to clear the bank. What is the amount of the collection float.

  A 10-year bond paying 8% annual coupon

A 10-year bond paying 8% annual coupons pays $1000 at maturity. If the required rate of return on the bond is 7%, then today the bond will sell (rounded to the nearest cent) for

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd