Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

URGENT!! PLEASE HELP! Baker Industries net income is $25000, its interest expense is $6000, and its tax rate is 40%. Its notes payable equals $25000,

URGENT!! PLEASE HELP!

Baker Industries net income is $25000, its interest expense is $6000, and its tax rate is 40%. Its notes payable equals $25000, long-term debt equals $75000, and common equity equals $255000. The firm finances with only debt and common equity, so it has no preferred stock. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.

What are the firms ROE and ROIC? Round your answers to two decimal places. Do not round intermediate calculations.

ROE ______ %
ROIC ______ %

ROE and ROIC
Net income $25,000
Interest expense $6,000
Tax rate 40.00%
Notes payable $25,000
Long-term debt $75,000
Common equity $255,000
Formulas
ROE #N/A
Partial Income Statement:
EBIT #N/A
Interest $6,000.00
EBT #N/A
Taxes #N/A
Net income $25,000.00
Capital Summary:
Notes payable $25,000.00
Long-term debt $75,000.00
Common equity $255,000.00
Total invested capital #N/A
ROIC #N/A

*** ROIC is NOT 7.04%

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

Methods And Finance

Authors: Emiliano Ippoliti, Ping Chen

1st Edition

3319498711, 978-3319498713

More Books

Students also viewed these Finance questions

Question

Explain the chemical properties of acids with examples.

Answered: 1 week ago

Question

Write the properties of Group theory.

Answered: 1 week ago