The arrow is pointing at the open area called the:

What are agency costs? What are the two types of agency costs?

Jasmine has a taxable income of $120,000 as a single filer. Using the tax rate table below, compute her a) total tax liability, b) average tax rate, and c) marginal tax rate.Taxable IncomeTax Rate$0 – 11,00010%$11,000 – 44,72512%$44,725 – 95,37522%$95,375 – 182,10024%$182,100 – 231,25032%$231,250 – 578,12535%$578,125+37%

Pioneer Aviation has total liabilities of $23,800 and total equity of $46,200. Current assets are $8,600. What is the common-size percentage for the current assets?

Given the total debt ratio, what other two ratios can be computed? Explain how.

Use the following income statement to calculate 1) the dividend payout ratio and 2) the retention ratio for Crown Heights Co.Income Statement (Crown Heights Co.):Sales = $62,000Costs = $47,850Taxable income = $14,150Taxes (25%) = $3,537.50Net income = $10,612.50Dividends = $4,700Addition to retained earnings = $5,912.50

Based on the following information for Northlake Tools Company, a) what growth rate can the firm maintain if no external financing is used (that is, EFN = 0)?  b) What is the sustainable growth rate?NORTHLAKE TOOLS COMPANY2024 Income Statement (in millions)Sales$5,000.0Costs4,350.0Taxable income$650.0Taxes (21%)136.5Net income$513.5Dividends256.8Addition to retained earnings256.8NORTHLAKE TOOLS COMPANY2024 Balance Sheet (in millions)AssetsLiabilities & Owners’ EquityCurrent assets$1,200.0Current liabilities$700.0Net fixed assets3,000.0Long-term debt1,500.0Total assets$4,200.0Owners’ equity2,000.0Total liab. & equity$4,200.0Solution (Percentage of Sales Approach)

Based on the following information for the Northlake Tools Company, what is EFN if sales are predicted to grow by 15 percent? Use the percentage of sales approach and assume the company is operating at full capacity. The payout ratio is constant. Use a 21 percent tax rate.NORTHLAKE TOOLS COMPANY2024 Income Statement (in millions)Sales$5,000.0Costs4,350.0Taxable income$650.0Taxes (21%)136.5Net income$513.5Dividends256.8Addition to retained earnings256.8NORTHLAKE TOOLS COMPANY2024 Balance Sheet (in millions)AssetsLiabilities & Owners’ EquityCurrent assets$1,200.0Current liabilities$700.0Net fixed assets3,000.0Long-term debt1,500.0Total assets$4,200.0Owners’ equity2,000.0Total liab. & equity$4,200.0Solution (Percentage of Sales Approach)

BRIGHTON CORPORATION2023 and 2024 Balance Sheets (in millions)Assets20232024Cash$120$145Accounts receivable310360Inventory420390Total current assets850895Net fixed assets1,9502,080Total assets$2,800$2,975Liabilities & Equity20232024Accounts payable$260$295Notes payable180210Total current liabilities440505Long-term debt900940Total equity1,4601,530Total liabilities & equity$2,800$2,975BRIGHTON CORPORATION2024 Income Statement (in millions)Sales$4,920Cost of goods sold3,150Depreciation310Earnings before interest and taxes (EBIT)1,460Interest paid230Taxable income1,230Taxes (21%)258Net income$972Calculate the following 2024 ratiosCurrent ratioCash ratioInventory turnoverReceivables turnover

Suppose Greenfield Industries issues a 20-year bond with a face value of $2,000 and an annual coupon rate of 8 percent. The bond makes annual coupon payments. If the required return (market interest rate) is 10 percent per year, what is the price of the bond today?