What is the corporate tax rate

Assignment Help Financial Management
Reference no: EM131182943

Timpano Inc. can each period have good sales with 50% probability or bad sales with 50% probability. In case of good sales the unlevered cash flow will be $80 million, in case of bad sales the unlevered cash flow will be $50 million. The unlevered beta of the company is 1.5, the expected return of the market portfolio is 4% while the risk-free return is 1%. Timpano's equity market value is $850 million and its debt is kept constant at $950 million.

What is the corporate tax rate? (Assume that the firm's cash flow is perpetual).

Reference no: EM131182943

Questions Cloud

Learning team project costing and evaluation-control : This paper must address the following topics for the learning team project that was selected for the week two assignment. I have attached the Week 2 paper to help with this assignment.
How many units of this contract should the firm buy-sell : HoleSale Inc, USA exports manhole covers to Japan and Germany. Over the next six month, the company anticipates sales of 14,880 units to Japan and 961 units to Germany. The price of manhole covers is set at JPY 1,199 and EUR 166 in Japan and Germany ..
Find the final weight, volume and pressure of the gas : A 10 cubic feet tank contains gas at a pressure of 500 psia, temperature of 85 degrees Fahrenheit and a weight of 25 lbs. a part of the gas was discharged and the temperature and pressure changed to 70 degrees Fahrenheit and 300 psia respectively...
Project statement of work-project scope : Choose any project you like or you may choose a case from the text.  Include in your analysis:
What is the corporate tax rate : Timpano Inc. can each period have good sales with 50% probability or bad sales with 50% probability. In case of good sales the unlevered cash flow will be $80 million, in case of bad sales the unlevered cash flow will be $50 million. What is the corp..
Discuss how union membership has changed over the past : After reading the article, discuss how union membership has changed over the past 20 years and identify some reasons for those changes. In your opinion did this shift occur because of a change in moral consciousness or for economic reasons? Provid..
Explain the strengths and weaknesses of the company : Using the concepts from this course, you will analyze the strengths and weaknesses of the company and write a report recommending whether or not to purchase the company stock.
Swimmer pool and patio supply : John Jr., has graduated from a local university with a degree in industrial management and joined his father's company as executive vice-president of operations.  Dad wants to John to prove himself and decided to assign a project to John.  20% of ..
Adjust the accounts to reflect the average cost method : Rockwell Corporation uses a periodic inventory system and has used the FIFO cost method since inception of the company in 1976. In 2013, the company decided to switch to the average cost method. Prepare the 2013 journal entry to adjust the accounts t..

Reviews

Write a Review

Financial Management Questions & Answers

  Experiencing rapid growth-what is the stock price

Navel County Choppers Inc. is experiencing rapid growth. The company expects dividends to grow at 15 percent per year for the next 8 years before leveling off at 6 percent into perpetuity. The required return on the company’s stock is 12 percent. If ..

  What is valences share price

Valence Electronics has 217 million shares outstanding. It expects earnings at the end of the year of $760 million. Valence pays out 40% of its earnings in total. 15% paid out as dividends and 25% used to repurchase shares. If Valence's earnings are ..

  What is principal outstanding after the first loan payment

John Doeber borrowed $150,000 to buy a house. His loan cost was 6% and he promised to repay the loan in 15 equal annual payments. What is the principal outstanding after the first loan payment?

  What is the amount of the operating cash flow

United Enterprises paid $12,000 in dividends and $21,300 in interest over the past year. Sales totalled $139,700 with costs of $101,400. The depreciation expense was $10,500. The applicable tax rate is 34 percent. What is the amount of the operating ..

  What should be the price of portage bay stock

Portage Bay Enterprise has $2 million in excess cash, no debt, and is expected to have free cash flow of $12 million next year. Its FCF is then expected to grow at a rate of 3% per year forever. If Portage Bay's equity cost of capital is 10% and it h..

  Create portfolio equally as risky as the market

You want to create a portfolio equally as risky as the market, and you have $500,000 to invest. Information about the possible investments is given below: Asset Investment Beta Stock A $ 130,000 .75 Stock B $ 150,000 1.20 Stock C 1.35 Risk-free asset..

  What is the book value per share of the company

The equity capital (par value) of a company EFG is $100 million. It has accumulated Retained earnings of $700 million. The company has 20 million shares outstanding. What is the Book Value per share ($) of the company?

  What is the firms expected or required return on equity

Silicon Water Company currently pays a dividend of $1 per share and has a share price of $20.- Now what is the firm's expected or required return on equity?

  What is the value of a put option with strike price

IBM stock currently sells for 44 dollars per share. Over 5 months the price will either go up by 13.5 percent or down by -6.5 percent. The risk-free rate of interest is 7.0 percent continuously compounded. What is the value of a put option with strik..

  Find the price of call option on stock-use daily compounding

The current price of a stock is $15. In 6 months, the price will be either $19 or $11. The annual risk-free rate is 3%. Find the price of a call option on the stock that has an strike price of $12 and that expires in 6 months. (Hint: Use daily compou..

  Capital surplus-what is new par value per share

The owners' equity accounts for Freya International are shown here. Common stock ($.40 par value) $ 32,500 Capital surplus 315,000 Retained earnings 698,120 Total owners’ equity $ 1,045,620. What is the new par value per share? If Freya declares a on..

  What is the firms average cost of capital

A firm’s capital consists of: - $10m in common with a 14% yield - $6m in preferred with a 7.5% coupon and a 9% yield - $4m in bonds with a 6% coupon and a 4.3% yield-to-maturity. Its average tax rate is 24% and its marginal tax rate is 32%. What is t..

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