InteractionBalIncStud

0 500 2500 l iabilities net worth c urrent l

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Unformatted text preview: rent A s s ets F ixed A s s ets T O T AL A S S E T S t = 1 200.0 50.0 250.0 L iabilities & Net Worth C urrent L iabilities L ong - T erm D ebt T otal L iabilities S ales C OGS G ros s P rofit t = 0 to 1 340.0 238.0 102.0 A dminis trative E xpens es E B IT 60.0 42.0 Interes t E xpens e EBT 0.0 42.0 T axes NE T INC O ME D ividend P olic y R E T AINE D E AR NING S 16.8 25.2 10.0 15.2 100.0 100.0 C ommon S toc k R etained E arning s T otal E quity 110.0 15.2 125.2 T O T AL L IAB . & NW 225.2 Calculating the Long-Term Debt Plug TA = CL + D + CS + RE RE = NI - Div = (EBIT - r D) (1-T) - Div TA = CL + D + CS + (EBIT - r D) (1-T) - Div D= TA − CL − CS − EBIT (1 − T ) + Div 1 − r(1 − T ) D= 250 − 100 − 110 − 42(1 − 0.4) + 10 1 − 0.1(1 − 0.4) D = $26.4 3 Balance SheetIncome Statement Interaction (Trial & Error Solution) B alanc e & Inc ome S tatement Interac tion P lug : L ong - T erm D ebt D ebt rate = T ax rate = C alc ulated D /A = B alanc e As s ets C urrent A s s ets F ixed A s s ets T O T AL A S S E T S L iabilities...
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This document was uploaded on 02/16/2014 for the course FIN 404 at University of Miami.

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