Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please slove on exel The company Meta has the following data: Sales 1,000 EBIT 100 Equity 100 Debt 0 The company Beta has the following

Please slove on exel

  1. The company Meta has the following data:

Sales 1,000

EBIT 100

Equity 100

Debt 0

The company Beta has the following data:

Sales 1,000

EBIT 100

Equity 100

Debt 0

But the company decides to increase leverage by paying a dividend of 50 at the beginning of the year.

The interest rate is 5%

Income tax rate is 25%

Both companies had 500 shares at the beginning of the year, with a face value of 0.1 per share.

At the end of the year, the market price for both companies is 750

Find Net Income

ROE

EPS

P/E ratio

For both companies and explain which one would be your choice if you were to invest in only one of them, explain in detail by using your calculations.

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

Short Term Financial Management

Authors: John Zietlow, Matthew Hill, Terry Maness

5th Edition

1516512405, 9781516512409

More Books

Students also viewed these Finance questions

Question

Use the figure below to answe the questions

Answered: 1 week ago

Question

How does the concept of hegemony relate to culture?

Answered: 1 week ago