The following are selected Financial information on Firm A and Firm B. You are been...
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Finance
The following are selected Financial information on Firm A and Firm B. You are been asked to complete the table by methodically calculating the missing information.
You will assume that Cost of Goods Sold (COGS) is 65% of Sales and that the company uses a marginal tax rate of 35%
Assume Cost of Depreciation is Zero
FIRM A FIRM B
Revenue $ 3,000 $ 3,000
COGS 1,950 1,950
Gross Profit 1,050 1,050
Operating Expenses (300) (300)
EBIT 750 750
Interest Expense $ 0 $ 24
EBT 750.769 726.154
Income Tax @35% 262,769 254.154
Net Income $ 488 $ 472
Earnings per share - -
Dividend per share - -
Expected Return on Equity - -
Estimated Share Price - -
Market value of Equity - -
Market value of Debt - -
Enterprise Value $ 2,181 $ 2,503
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