(Answered) Answer the questions below based on the following

Finance

Answer the questions below based on the following information. The tax rate is 35 percent and all dollars are in millions.

	Locktite Inc.	Stork Systems
Earnings before interest and taxes	$380	$ 394
Debt (at 10% interest)	$240	$1,240
Equity	$760	$ 310

a. Calculate each company's ROE, ROA, and ROIC.

b. Why is Stork's ROE so much higher than Locktite's? Does this mean Stork is a better company? Why or why not?

c. Why is Locktite's ROA higher than Stork's? What does this tell you about the two companies?

d. How do the two companies' ROICs compare? What does this sug- gest about the two companies?

View complete question

Corporate Finance, Finance

Category:- Corporate Finance
Reference No.:- M91566334
Price:- $40

Verified Expert

Priced at $80 Now at $40, Verified Solution

Have any Question?Write your Review or question?

Related Questions in Corporate Finance

Question - assume that the average firm in your companys

Question - Assume that the average firm in your company's industry is expected to grow at aconstant rate of 6 percent and its dividend yield is 7 percent. Your company is about as risky as the average firm in the industr ...

Descriptionstudents are required to study undertake

Description: Students are required to study, undertake research, analyse and conduct academic work within the areas of corporate finance. The assignment should examine the main issues, including underlying theories, impl ...

Case - campar industries incthis case is about variance

Case - Campar Industries, Inc. This case is about variance analysis. The purpose of this case is to allow you to break down several different types of variance that might occur in a business. For each of the types of var ...

Corporate finance assignment - required this assessment

Corporate Finance Assignment - Required: This assessment task is a written report and analysis of the financial performance of a selected company in order to provide financial advice to a wealthy investor. It will be bas ...

1 explain the factors that determine beta and how an asset

1. Explain the factors that determine beta and how an asset beta can differ from equity betas. 2. Thornley Machines is considering a 3-year project with an initial cost of $618,000. The project will not directly produce ...

Assignment -task requirements you have been randomly

Assignment - Task requirements: You have been randomly assigned an Australian publicly listed company (refer to the separate excel spreadsheet provided to identify your company). Using the financial reports for your comp ...

Mini case assignment -problems - use internet to identify a

Mini Case Assignment - Problems - Use internet to identify a house or condo that you may be interested in investing as a rental property for 10+ years. (Suggested price range between $250k - $1 million) 1. Estimate the a ...

Assignment - preparing and analyzing a cash budgetselect

Assignment - Preparing and analyzing a cash budget Select assumptions for the following values that fall between the minimum and maximum indicated. Assumption Minimum Maximum a. Sales in month 1 $150,000 $250,000 b. Incr ...

Discussion question -what have you learned about financial

Discussion Question - What have you learned about financial derivatives? What concepts learned do you plan to utilize in your current job, career, and personal life?

Questions -1 this week we discuss capital budgeting methods

Questions - 1. This week we discuss capital budgeting methods and process. Could you apply the knowledge your learn this week to make better decisions in your personal life or professional duties? Please elaborate your a ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Corporate Finance Expert