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ork -Ronnessa Casas Secure l https://www.mathd.com/Student/PlayerHomework.aspx?homeworkid=501591584 FIN 301 (1001-1004) Principles of Managerial Finance F18 Homework: Chapter 1 Homework ave core: 0 of 1 pt P1-10 (similar to 10 of 10 (6 complete) HW Score: 60%, 6 of 1 Question Help Interest versus dividend expense Michaels Corporation expects eamings before interest and taxes to be $55,000 for the current period. Assuming a flat ordinary tax rate of 30%, compute the firm's earnings after taxes and earnings available for common stockholders (earnings after taxes and preferred stock dividends, if any) under the following conditions: a. The firm pays $12,800 in interest b. The firm pays $12,800 in preferred stock dividends. a. Complete the fragment of Michaels Corporation's income statement below to compute the firm's earnings after taxes and earnings available for common stockholders under condition (a). (Round to the nearest dollar.) EBIT Less: Interest expense Earnings before taxes Less: Taxes (30%) Earnings after taxes Less: Preferred dividends Earnings available for common stockholders $ Enter any number in the edit fields and then click Check Answer Check Answer Clear All part remainingExplanation / Answer
Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount EBIT 55,000.00 Less Interest Expense (12,800.00) Earnings before taxes 42,200.00 Less Taxes at 30% (12,660.00) Earnings after Taxes 29,540.00 Less Preferred dividends - Earnings available for common stockholder 29,540.00 b) EBIT 55,000.00 Less Interest Expense - Earnings before taxes 55,000.00 Less Taxes at 30% (16,500.00) Earnings after Taxes 38,500.00 Less Preferred dividends (12,800.00) Earnings available for common stockholder 25,700.00
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