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    BA II Financial Calculator

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    Please show me how to solve each problem - Step by Step using a BA II Financial Calculator - The problems and answers are supplied.
    Need explanation with the BA II calculator
    Please see 5 problems below

    19. After-tax returns
    . A corporation recently purchased some preferred stock that has a before-tax yield of 7 percent. The company has a tax rate of 40 percent. What is the after-tax yield on the preferred stock?

    20. After-tax returns
    . West Corporation has $50,000 which it plans to invest in marketable securities. The corporation is choosing between the following three equally risky securities: Alachua County tax-free municipal bonds yielding 6 percent; Exxon bonds yielding 9.5 percent; GM preferred stock with a dividend yield of 9 percent. West's corporate tax rate is 35 percent. What is the after-tax return on the best investment alternative? (Assume the company chooses on the basis of after-tax returns.)

    21. Net income
    . Edge Brothers recently reported net income of $385,000. The tax rate is 40 percent. The company's interest expense was $200,000. What would have been the company's net income if they would have been able to double their operating income (EBIT), assuming that the company's tax rate and interest expense remain unchanged?

    22. Retained earnings
    . Sanguillen Corp. showed retained earnings of $400,000 on its balance sheet last year. This year, the company's earnings per share (EPS) were $3.00 and its dividends paid per share (DPS) were $1.00. The company has 200,000 shares of stock outstanding. What is the level of retained earnings on the company's balance sheet this year?

    23. Net operating profit after taxes (NOPAT)
    . A company has the following income statement. What is its net operating profit after taxes (NOPAT)?

    Sales $1,000
    Costs 700
    Depreciation 100
    EBIT $ 200
    Interest expense 50
    EBT $ 150
    Taxes (40%) 60
    Net income $ 90

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    Solution Preview

    Please show me how to solve each problem - Step by Step using a BA II Financial Calculator - The problems and answers are supplied.
    Need explanation with the BA II calculator
    Please see 5 problems below

    19. After-tax returns
    . A corporation recently purchased some preferred stock that has a before-tax yield of 7 percent. The company has a tax rate of 40 percent. What is the after-tax yield on the preferred stock?

    Answer: 6.16%

    1 - (0.3 x 0.4) x 7 = 6.16

    20. After-tax returns
    . West Corporation has $50,000 which it plans to invest in marketable securities. The corporation is choosing between the following three equally ...

    Solution Summary

    This solution is comprised of a detailed explanation how to use BA II Financial Calculator to solve the problems.

    $2.19

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