16 11 Mercury Airs debt consists of $50,000 in accountspayable, $100,0...

16-11 Mercury Airâ€™s debt consists of $50,000 in accounts payable, $100,000 in 10 percent notes payable. And...

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Finance

16-11
Mercury Airâ€™s debt consists of $50,000 in accountspayable, $100,000 in 10 percent notes payable. And $240,000 in 8percent bonds. Mercury has no preferred stock. If its marginal taxrate is 35 percent, what is Mercuryâ€™s financial breakevenpoint?
16-14
Stumpyâ€™s Gator Farm forecasts that its net income willbe $46,800 this year. The firmâ€™s marginal tax rate is 35 percent,and it must pay $36,000 interest on outstanding debt. Stumpyâ€™s hasno preferred stock. What is the firmâ€™s degree of financial leverage(DFL)?

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1611 Notes payable 100000 Interest expense on notes payable Notes payable x interest rate 100000 x 10 10000 Bonds 2400000 Interest expense on bonds Bonds x interest rate See Answer

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