What was the companys free cash flow for the year

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1) Corporate Bonds issued by ABC Corporation currently issued 12.1%. Municipal Bonds of equal risk currently yield 7.7%. At what tax rate would an investor be indifferent between these two bonds?

2) BC company had a taxable income of $508,214 from operations after all operating costs but before interest charges of $50,673, dividends received of $49,352, dividends paid of $10,000, and income taxes. What is the firm's after-tax income?

Hint: first use the tax table to compute taxes before calculating the after-tax income.

3) ABC company had a taxable income of $581,229 from operations after all operating costs but before interest charges of $58,390, dividends received of $76,648, dividends paid of $10,000, and income taxes. What is the firm's income tax liability?

Hint: use the tax table to compute taxes.

4) ABC corporation has operating income of $44,569. The company's depreciation expense is $9,918. The company is all equity-financed and it faces a tax rate of 30%. What is the company's net cash flow?

5) Culligan, Inc., has current assets of $20,470, net fixed assets of $134,249, current liabilities of $19,925, and long-term debt of $51,567. What is the shareholders' equity?

6) ABC's EBIT is $5 million. The depreciation expense is $0.5 million and interest expense is $0.5 million. The corporate tax rate is 30%. The company has 8 million in operating current assets and $6 million operating current liabilities. It has $5 million in net plant and equipment. The after-tax cost of capital (WACC) is 6%. Assume that the only non-cash item is depreciation. The total net operating capital last year was $4 million.

What was the company's free cash flow for the year?

Reference no: EM13726917

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