User Account

All Pages

Find out degree of financial leverage at fifty percent rate

Assignment Help Accounting Basics
Reference no: EM132819827

Sunrise Ltd has a asset of 400,000 in total where it comprises of equity 70% and debt of 30% (12%) interest. The company was planning to do some investment and it anticipates the increase of current income from 40,000 to 60,000. There are two options available to resource finance namely,

A. Share issue of 1,000 at rate of 100.

B. Bond selling of 100,000 with rate of interest 12.5%. There is no preferred stock in the structure of capital.

Problem 1: Find out:

A. Optimal capital structure

B. Degree of Financial Leverage at 50% rate of tax

C. EBIT and EPS at Breakeven point

Reference no: EM132819827

Questions Cloud

Incremental change and radical change : Discuss the different strategies associated with incremental change and radical change.
How could the states attorney have used discretion : Read a comprehensive version of the scenario. Respond to each of the questions below from the perspective of (1) the police, (2) the courts, and (3) corrections
Determining the alternatives internal production : At what quantity would alternatives Internal production 1 and Internal production 2 yield the same profit?
How much will she pay in federal income taxes annually : Starting next week she will receive a $40 per week raise. After the raise, how much will she pay in federal income taxes Annually
Find out degree of financial leverage at fifty percent rate : Find out Degree of Financial Leverage at 50% rate of tax. Bond selling of 100,000 with rate of interest 12.5%. There is no preferred stock in the structure
What is the probability that the project : The following table represents the set of activities required to complete project, along with their time estimates for PERT calculations.
Interest rates can affect business decisions : Many managers do not understand the various ways that interest rates can affect business decisions.
What is the minimum makespan for set of five jobs : An automobile detailing shop has the following jobs waiting to be processed. All jobs (cars requiring detailing) must first be cleaned, then waxed.
Provide journal entries necessary to account for application : Kosta Ltd has received applications for 4 million shares during July 2020. Provide journal entries necessary to account for the applications of Kos Ltd shares.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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