Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider the following income statement for Kroger Inc. (all figures in $ Millions) Year 2006 2005 2004 Total Sales 60,553 56,434 53,791 Cost of Goods

Consider the following income statement for Kroger Inc. (all figures in $ Millions)

Year 2006 2005 2004
Total Sales 60,553 56,434 53,791
Cost of Goods Sold 45,565 42,140 39,637
Selling, General & Admin Expenses 11,688 12,191 11,575
Depreciation 1265 1256 1209
Operating Income 2035 847 1370
Other Income 0 0 0
EBIT 2035 847 1370
Interest Expense 510 557 604
Earnings Before Tax 1525 290 766
Taxes (35%) 534 102 268
Net Income 991 189 498
  1. The interest rate tax shield for Kroger in 2006 is:
  2. The interest rate taxe shield for Kroger in 2005 is:
  3. The income that would be available to equity holders in 2006 if Kroger was not levered is:

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions

Question

Explain reference groups and the criteria used to classify them.

Answered: 1 week ago