Vonte Co. has a 22 percent tax rate. Its total interest payment for the year just ended

Question:

Vonte Co. has a 22 percent tax rate. Its total interest payment for the year just ended was $15.7 million. What is the interest tax shield? How do you interpret this amount?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Essentials Of Corporate Finance

ISBN: 9781265414962

11th Edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

See More Books

Question Posted: Jan 02, 2023 07:08 AM

See More Questions

The master budget for the year just ended was on a computer that was just hacked. You feel responsible because you didnt install anti-hacking software on the computer and you didnt have a backup...
How do you interpret a PEG ratio?
How do you interpret the first quartile, median, and third quartile?
Horizontal analysis (trend analysis) percentages for Epstein Companys sales, cost of goods sold, and expenses are shown below. Did Epsteins net income increase, decrease, or remain unchanged over the...
1. Giuliani claimed that his contractual right to play golf at Duke was based on (a) Coach Myerss oral statements and (b) Dukes Student-Athlete Handbook, the Duke Student Bulletin, the Duke Athletic...
You are required to answer the following five questions: (a) Vinnys business only sells one product, and his opening inventory at 1 June is 23 units valued at 12 each. The following movements then...
What is exporting? What are its advantages and disadvantages? LO.1
A block diagram of a closed-loop system is shown in figure.(a) Derive a closed-loop transfer function for disturbance changes, Y(s)/Ds).(b) For the following transfer functions, what values of Kc...
Agee Technology, Inc., issued 9% bonds, dated January 1, with a face amount of $920 million on July 1, 2021, at a price of $870 million. For bonds of similar risk and maturity, the market yield is...
A motor equipped with a flywheel has to supply a load torque of 600 N-m for 10sec followed by a no-load period long enough for the flywheel to regain its full -speed. It is desired to limit he motor...
Garcia Co. has no debt. Its cost of capital is 9.4 percent. Suppose the company converts to a debt-equity ratio of 1.0. The interest rate on the debt is 5.3 percent. Ignoring taxes, what is the...
Farmington Co. can borrow at 6.3 percent. The company currently has no debt, and the cost of equity is 12.9 percent. The current value of the firm is $685,000. What will the value be if the company...
In Exercises find the area of the region. y 0.5 0.4 0.3 0.2 0.1 1 6 16 + x 1 2 3 + 4 5 X
The four forces, 400, 500, 600 and 700N are acting along the edges of a 0.8m cube as shown. Represent the resultant of these forces by 1) A force Fr through the point A 2) A couple moment Mr (give...
Problem 1. What is the degree of freedom of the following mechanism? Sliding joint Sliding joint
PILAR Manufacturing Co. has three producing departments (P, I, & L), and two service departments (A&R). The total estimated departmental expenses for 2021 before distribution of service department...
1. A volleyball player serves the ball at point A with an initial velocity vo at an angle of 20 to the horizontal. (a) Determine the minimum velocity of the serve such that the ball will just clear...
9.50. Dipping low ** A top with I = 3/3 floats in outer space and initially spins around its x3 axis with angular speed w3. You apply a strike at the bottom point, directed into the page, as shown in...
The following information was drawn from the year-end balance sheets of Longs Wholesale, Inc.: The following is additional information regarding transactions that occurred during Year 2: 1. Longs...
Shreemaya Hotel in !adore was facing a problem of low demand for its rooms due to off season. The Managing Director (MD) of the hotel, Mrs. Sakina was very worried. She called upon the Marketing...
Ex-Dividend Stock Prices how do you think this tax law change affects ex-dividend stock prices?
Stock repurchases how do you think this tax law change affected the relative attractiveness of stock repurchases compared to dividend payments?
Stock Splits for the company in problem 2, show how the equity accounts will change if. a. Quadrangle declares a four-for-one stock split. How many shares are outstanding now? What is the new par...
( US$ millions ) 1 2 / 3 1 / 2 0 1 4 1 2 / 3 1 / 2 0 1 3 1 2 / 3 1 / 2 0 1 2 1 2 / 3 1 / 2 0 1 1 Net income $ 1 4 , 4 3 1 $ 1 2 , 8 5 5 $ 1 0 , 7 7 3 $ 9 , 7 7 2 Depreciation 3 , 5 4 4 2 , 7 0 9 1 ,...
net present value of zero
Suppose at Time 0 a dealer buys $100 par of a 4%-coupon 30-year bond for a price of par and posts the bond as collateral in a repo with zero haircut. The repo rate is 5%. Then, 183 days later, the...

Vonte Co. has a 22 percent tax rate. Its total interest payment for the year just ended

Question:

Step by Step Answer:

The interest tax shield is the total interest paid times the ...View the full answer

Essentials Of Corporate Finance

Students also viewed these Business questions