BAZB Corp. has $25 million in sales last year. Cost of goods sold was $8 million, depreciation
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Question:
BAZB Corp. has $25 million in sales last year. Cost of goods sold was $8 million, depreciation expense was $2 million, and administration expenses were $3 million.
If the firm’s average tax rate is 20% and BAZB had an outstanding debt of $100 million with 3% interest rate, then
a. What was BAZB’s EBIT (Earnings before interest and taxes) and taxable income?
b. What was BAZB’s Net Income?
c. If BAZB’s payout ratio was 30% last year, how much dividend payment was made? What was the increase in retained earnings?
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0133400694
1st canadian edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi
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