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Unformatted text preview: depreciation). ABC repaid $200 of their short-term debt at year-end 2008. The interest rate on ABC’s debt is 10% per annum. ABC made capital expenditures of $385 at year-end 2008. Because these capital expenditures were at year-end, ABC’s 2008 depreciation expense (also CCA) is a rate for depreciation times Net Fixed Assets at the beginning of 2008 (year-end 2007). The depreciation rate is 5% per annum. ABC paid dividends to shareholders of $X during 2008. ABC's tax rate is 40%. Also, during 2008, ABC sold new shares to new shareholders in the amount of $125 (no shares were repurchased). ABC’s 2008 free cash flow was $353. Required: (a) Determine ABC’s 2008 dividend payment, $X. (b) Determine ABC’s 2008 rate of return on invested capital, after tax and after depreciation, using beginning of period invested capital. Solution...
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This note was uploaded on 02/10/2011 for the course BUS 312 taught by Professor Alan during the Spring '03 term at Simon Fraser.
- Spring '03