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A firm incurs $50,000 in interest expenses each year. If the tax rate of the firm is 30%, what is the effective after-tax interest rate expense for the firm?
Basic Finance, Finance
Question - Gamma Energy is an oil producing company that owns an oil field from which it can deliver 10 mln barrels of oil per year for the next four years. The current oil price is USD 75 per barrel. Extraction costs ar ...
You have inherited an apple orchard and want to sell it in the next four years. An expert in apple orchard valuation has estimated the after-tax cash flow you would receive if you sold at the end of each of the next four ...
A company has a projected times interest earned ratio of 4.0 for the next year. What percentage could EBIT decline next year before the company's times interest earned ratio would fall below 1.0?
Quality Home Made Ice Cream has plans to pay decreasing annual dividends of $1.50, $1.25, and $1.00 over the next three years, respectively. After that, the firm will increase the dividend by 4% each year. What is the va ...
The stock of Business Adventures sells for $65 a share. Its likely dividend payout and end-of-year price depend on the state of the economy by the end of the year as follows: Dividend Stock Price Boom $2.40 $73 Normal ec ...
Why does EPS decrease if a companies additional capital it wants is obtained by issuing more shares? How would it affect a companies decision about issuing equity to try and raise their capital? What would be the firms d ...
What are the advantages of purchasing an existing business opposed to opening a new venture?
1. What considerations do you need to take when considering "time value of money"? 2. Why is the following statement true? "A dollar today is worth more than a dollar tomorrow."
A closed-end fund starts the year with a net asset value of $25. By year-end, NAV equals $26.40. At the beginning of the year, the fund is selling at a 3% premium to NAV. By the end of the year, the fund is selling at a ...
What would be a potential investment strategy that would basically take advantage of the fact that we are currently in the longest bull market in a while and also that index investing has become really popular. (how does ...
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