Easy Problems 1-9\ (6-1)Personal After-Tax Yield\ An investor recently purchased a corporate bond that yields 7.68%. The investor is in the

25%

federal-plus-state tax bracket. What is the bond's after-tax yield to the investor?\ (6-2)Personal After-Tax Yield\ Corporate bonds issued by Johnson Corporation currently yield 8.0%. Municipal bonds of equal risk currently yield

5.5%

. At what personal tax rate would an investor be indifferent between these two bonds?\ (6-3)Income Statement\ Holly's Art Galleries recently reported

$7.9

million of net income. Its EBIT was

$13

million, and its federal tax rate was

21%

(ignore any possible state corporate taxes). What was its interest expense? (Hint: Write out the headings for an income statement and then fill in the known values. Then divide

$7.9

million net income by

1-T=0.79

to find the pre-tax income. The difference between EBIT and taxable income must be the interest expense. Use this procedure to work some of the other problems.)\ (6-4)Income Statement\ Nicholas Health Care Systems recently reported an EBITDA of

$25.0

million and net income of

$15.8

million. It had

$2.0

million of interest expense, and its federal tax rate was

21%

(ignore any possible state corporate taxes). What was its charge for depreciation and amortization?\ (6-5)Net Cash Flow\ Kendall Corners Inc. recently reported net income of

$3.1

million and depreciation of

$500,000

. What was its net cash flow? Assume it had no amortization expense.\ (6-6)Statement of Retained Earnings\ In its most recent financial statements, Del-Castillo Inc. reported

$70

million of net income and

$900

million of retained earnings. The previous retained earnings were

$855

million. How much in dividends did the firm pay to shareholders during the year?\ (6-7) Net Operating Profit after Taxes (NOPAT)\ Zucker Inc. recently reported $4 million in earnings before interest and taxes\ (EBIT). Its federal-plus-state tax rate is

25%

. What is its net operating profit after taxes (NOPAT)?

Easy Problems 1-9 (6-1)Personal After-Tax Yield An investor recently purchased a corporate bond that yields 7.68%. The investor is in the 25% federal-plus-state tax bracket. What is the bond's after-tax yield to the investor? (6-2)Personal After-Tax Yield Corporate bonds issued by Johnson Corporation currently yield 8.0%. Municipal bonds of equal risk currently yield 5.5%. At what personal tax rate would an investor be indifferent between these two bonds? (6-3)Income Statement Holly's Art Galleries recently reported $7.9 million of net income. Its EBIT was $13 million, and its federal tax rate was 21% (ignore any possible state corporate taxes). What was its interest expense? (Hint: Write out the headings for an income statement and then fill in the known values. Then divide $7.9 million net income by 1T=0.79 to find the pre-tax income. The difference between EBIT and taxable income must be the interest expense. Use this procedure to work some of the other problems.) (6-4)Income Statement Nicholas Health Care Systems recently reported an EBITDA of $25.0 million and net income of $15.8 million. It had $2.0 million of interest expense, and its federal tax rate was 21% (ignore any possible state corporate taxes). What was its charge for depreciation and amortization? (6-5)Net Cash Flow Kendall Corners Inc. recently reported net income of $3.1 million and depreciation of $500,000. What was its net cash flow? Assume it had no amortization expense. (6-6)Statement of Retained Earnings In its most recent financial statements, Del-Castillo Inc. reported $70 million of net income and $900 million of retained earnings. The previous retained earnings were $855 million. How much in dividends did the firm pay to shareholders during the year? (6-7) Net Operating Profit after Taxes (NOPAT) Zucker Inc. recently reported $4 million in earnings before interest and taxes (EBIT). Its federal-plus-state tax rate is 25%. What is its net operating profit after taxes (NOPAT)