Brutus Co. plans to launch a new type of indelible ink pen….

Brutus Co. plans to launch a new type of indelible ink pen. Advertising for the new product will be heavy and will cost the company $9 million, although the company expects general revenues of $280 million next year from sources other than sales of the new pen. If Brutus Co. has a corporate tax-rate of 35% on its pretax income, what effect will the advertising for the new pen have on its taxes?

On a particular date, the information concerning Office Depo…

On a particular date, the information concerning Office Depot, Incorporated, was given on Google Finance: Market Cap = $1.89Bn, Shares = 275Mil, EPS = $0.74, P/E = 9.26. Its competitor, Staples Incorporated, had a stock price of $24.33. Which of the following is closest to the EPS of Staples Incorporated if it is estimated using valuation multiples based on price-earnings ratios?

Brutus Co. is deciding whether to sponsor a racing team for…

Brutus Co. is deciding whether to sponsor a racing team for a cost of $1 million. The sponsorship would last for three years and is expected to increase cash flows by $430,000 per year. If the discount rate is 6.9%, what will be the change in the value of the company if Brutus Co. chooses to go ahead with the sponsorship?