. How would each of these plans affect earnings per share? Consider the current plan and the two new plans. b-1. Compute the earnings per share if return on assets fell to 5.05 percent. (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) Which plan would be most favorable if return on assets fell to 5.05 percent? Consider the current plan and the two new plans. multiple choice 1 Plan E Current Plan Plan D
Dickinson Company has $12,020,000 million in assets. Currently half of these assets are financed with long-term debt at 10.1 percent and half with common stock having a par value of $8. Ms. Smith, Vice President of Finance, wishes to analyze two refinancing plans, one with more debt (D) and one with more equity (E). The company earns a
Under Plan D, a $3,005,000 million long-term bond would be sold at an interest rate of 12.1 percent and 375,625 shares of stock would be purchased in the market at $8 per share and retired.
Under Plan E, 375,625 shares of stock would be sold at $8 per share and the $3,005,000 in proceeds would be used to reduce long-term debt.
a. How would each of these plans affect earnings per share? Consider the current plan and the two new plans.
b-1. Compute the earnings per share if return on assets fell to 5.05 percent. (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)
Which plan would be most favorable if return on assets fell to 5.05 percent? Consider the current plan and the two new plans.
multiple choice 1
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Plan E
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Current Plan
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Plan D
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