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please help with the LAST calculation and check the fill in the blanks- the LAST option for fill in the blank is agressive or conservative
please help with the LAST calculation and check the fill in the blanks- the LAST option for fill in the blank is agressive or conservative
Osato Chemicals Inc. is a small company and is considering a project that will require $550,000 in assets. The project will be financed with 100% equity. The company faces a tax rate of 25%. What will be the ROE (return on equity) for this project if it produces an EBIT (earnings before interest and taxes) of $155,000? 21.14% O 23.25% O 15.86% 0 13.74% What will be the project's ROE if it produces an EBIT of -$60,000 and it finances 50% of the project with equity and 50% with debt? When calculating the tax effects, assume that Osato Chemicals Inc. as a whole will have a large, positive income this year. -26.11% Determine what the project's ROE will be if its EBIT is - $60,000. When calculating the tax effects, assume that Osato Chemicals Inc. as a whole will have a large, positive income this year. -24.80% -8.2% 0 -28.72% O-6.97% 0 -33.94% 0 -7.79% O-9.84% The use of financial leverage increases the expected ROE, increases the probability of a large loss, and consequently increases the risk borne by stockholders. The greater the firm's chance of bankruptcy, the lower its optimal debt ratio will be. manager is more likely to use debt in an effort to boost profits. Osato Chemicals Inc. is also considering financing the project with 50% equity and 50% debt. The interest rate on the company's debt will be 13%. What will be the project's ROE if it produces an EBIT of $155,000? 35.77% 0 27.64% O 32.52% 0 24.39%Step by Step Solution
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