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Calculation of Issue of Debt and Return on Equity

eBook (PDF), 4 Pages
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Einstein Company currently has $800,000 owners’ equity and no long-term debt. Its expected income for 2009 is $100,000 and it is object to a 20 percent tax rate. What is Einstein’s planned return on equity? If Einstein issues $200,000 in debt it anticipates that the interest expense will be $14,000. However it expects to use this money and increase sales such that the income before interest and taxes will be $150,000. If Einstein issues the debt what is its planned return equity?
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Product Details

Published
April 10, 2013
Language
English
Pages
4
File Format
PDF
File Size
603.99 KB

Formats for this Ebook

PDF
Required Software Any PDF Reader, Apple Preview
Supported Devices Windows PC/PocketPC, Mac OS, Linux OS, Apple iPhone/iPod Touch... (See More)
# of Devices Unlimited
Flowing Text / Pages Pages
Printable? Yes
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