User Account

All Pages

What is its operating roa

Assignment Help Financial Management
Reference no: EM131072776

A firm has an ROE of 3%, a debt/equity ratio of 0.7, a tax rate of 30%, and pays an interest rate of 9% on its debt. What is its operating ROA? (Do not round intermediate calculations.Round your answer to 2 decimal places.)

Reference no: EM131072776

Questions Cloud

Comparing two savings accounts : You are comparing two savings accounts. Account A has an APR of 4.65 percent and an EAR of 4.75 percent. Account B has an APR of 4.70 percent and an EAR of 4.70 percent. Given this, you should invest in account:
Define appropriate vectors, and restate the problem : Define an appropriate matrix, and restate the problem using the phrase "columns of A."
What is the effective cost of borrowing in case : Your firm has an average collection period of 24 days. Current practice is to factor all receivables immediately at a discount of 1.4 percent. What is the effective cost of borrowing in this case?
What should be the value of the put : A put option on a stock with a current price of $42 has an exercise price of $44. The price of the corresponding call option is $3.60. According to put-call parity, if the effective annual risk-free rate of interest is 6% and there are four months un..
What is its operating roa : A firm has an ROE of 3%, a debt/equity ratio of 0.7, a tax rate of 30%, and pays an interest rate of 9% on its debt. What is its operating ROA?
Personal creativity inventory to introduction : This inventory provides you the opportunity to assess, reflect on, and reduce possible personal barriers to creativity. For each of the statements in the inventory, use the following scale to express which number best corresponds to your agreement..
Assess the profitability of capital budgeting projects : Northwest Utility Company faces increasing needs for capital. Fortunately, it has an Aa3 credit rating. The corporate tax rate is 40 percent. Northwest’s treasurer is trying to determine the corporation’s current weighted average cost of capital in o..
Increase firm financial leverage : Which of the following would increase a firm's financial leverage? According to the MM model of capital structure, the present value of the tax shield is offset by potential ____, resulting in an optimal capital structure. The presence of a large amo..
About as risky as the firm existing assets : Midwest Electric Company (MEC) uses only debt and common equity. It can borrow unlimited amounts at an interest rate of rd = 9% as long as it finances at its target capital structure, which calls for 35% debt and 65% common equity. These two projects..

Reviews

Write a Review

Financial Management Questions & Answers

  Explain how the euro may affect uk international trade

Explain how the euro may affect UK international trade. When South Korea's export growth stalled, some South Korean firms suggested that South Korea's primary export problem was the weakness in the Japanese yen.

  Annual standard deviation of returns on stock

The annual standard deviation of returns on Stock A’s equity is 31% and the correlation coefficient of these returns, with those on the market index (S&P 500 index), is 0.82. Comparable numbers of Stock B are 34% and 0.64. What can you say about Stoc..

  Analyzes a legalethical issue or situation relating to a

prepare an 11- to 15-page paper excluding title page and reference page that analyzes a legalethical issue or situation

  Leverage and eps

(Leverage and EPS) You have developed the following pro forma income statement for your corporation: Sales $45,703,000. Variable costs (22,716,000). Revenue before fixed costs $22,987,000. Fixed costs(9,182,000). If sales should decrease by 30 percen..

  After convertable bond is exchanged of equity

All else equal a firm should see its return on assets ______________ after a convertable bond is exchanged of equity.

  Construct an amortization schedule

You take out an amortized loan for $10,000. The loan is to be paid in equal instalments at the end of each of the next 5 years. The interest rate is 8%. Construct an amortization schedule.

  Calculate your net profit on the option

You have purchased a call option (100 contracts) on Mercer Corporation common stock. The option has an exercise price of $20.00 and Mercer’s stock currently trades at $20.00. Calculate your net profit on the option if Mercer Corporation’s stock price..

  Compute the npv for project

Compute the NPV for Project

  What is the total cost of the watch radio for the five years

Dick Tracy builds a two way wrist radio for $8,000. It costs Dick $1800 a year to operate the radio. Dick uses the wrist radio for 5 years before upgrading the electronics for $3000. What is the total cost of the watch radio for the 5 years? Dick has..

  Face value bonds outstanding

Best Western has $1,000 face value bonds outstanding. These bonds pay interest semi-annually, mature in 10 years, and have a 5 percent coupon. The current price is quoted at 95.5. What is the YTM? %?

  Vehicles expected life of three years as delivery vehicle

You are trying to pick the least-expensive car for your new delivery service. You have two choices: the Scion xA, which will cost $21,500 to purchase and which will have OCF of –$2,700 annually throughout the vehicle’s expected life of three years as..

  Paid prior to paying the common stockholders

A firm has issued cumulative preferred stock with a $100 par value and a 12 percent annual dividend. For the past two years, the board of directors has decided not to pay a dividend. The preferred stockholders must be paid prior to paying the common ..

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: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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