Debt-equity ratio of 0.75

(1) Brooks Company has a debt-equity ratio of 0.75. Return on assets is 10.4 percent, and total equity is $900,00. What is the equity multiplier? Return on equity? Net income?

(2) If the SGS Corp. has a 13 percent ROE and a 25 percent payout ratio, what is its sustainable growth rate?

(3) Conrad Co. had $285,000 in taxable income. Using the rates from the attached (see attached table) :CORPORATE TAX RATES", calculate the company's income taxes. What is the average tax rate? what is the marginal tax rate?

(4) Brees, Inc., has current assets of $7,500, net fixed assets of $28,900, current liabilities of $5,900, and long-term debt of $18,700. What is the value of the shareholders' equity account for this firm? How much is net working capital?

(5) Williams, Inc., has sales of $25,300, costs of $9,100, depreciation expense of $950. If the tax rate is 40 percent, what is the operating cashflow, or OCF?

(6) Tyler, Inc., has sales of $753,000, costs of $308,000, depreciation expenses of $46,000, interest expense of $21,500, and a tax rate of 35percent. What is the net income for the firm? Suppose the company paid out $67,000 in cash dividends. What is the addition to retained earnings?


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Solution discusses the debt-equity ratio of 0.75