Balance sheet and income statement data indicate the following: Company A Company B $1,200,000 $900,000 495,000 130,000 75,000 12,000 50,000 0 21,000 28,000 a. For each company, what is the times interest earned ratio? (Round to one decimal place.) Company A 8 Company B b. Which company gives potential creditors more protection? Bonds payable, 8%, 24-year bonds Income before income tax for year Income tax for year Interest payable Interest receivable

Balance sheet and income statement data indicate the following: Company A Company B $1,200,000 $900,000 495,000 130,000 75,000 12,000 50,000 0 21,000 28,000 a. For each company, what is the times interest earned ratio? (Round to one decimal place.) Company A 8 Company B b. Which company gives potential creditors more protection? Bonds payable, 8%, 24-year bonds Income before income tax for year Income tax for year Interest payable Interest receivable

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Company X pays interest to the amount of R1 500 a year on total liabilities of R10 000. It can also issue bonds with a YTM of 12%. What will the relevant before tax cost of debt be when calculating that WACC for the company? a. 18% b. 12% c. 15% d. 8%
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Balance sheet and income statement data indicate the following: Bonds payable, 10% (due in two years) Preferred 5% stock, $100 par (no change during year) Common stock, $50 par (no change during year) Income before income tax for year Income tax for year Common dividends paid Preferred dividends paid Interest expense Based on the data presented, what is the times interest earned ratio? Round your answer to two decimal places. 2.46 3.07 0.41 5.07 $868,000 263,400 2,167,800 353,540 81,447 108,390 13,170 86,800
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Consider the following balance sheet for Northern Highland Credit Union (NHCU) before answering parts (i) through (v). Assets ($ million) $ Liabilities ($ million) $ Cash 30 Overnight interbank borrowing (7.00%) 160 T-notes 2 month (7.05%) 60 2-year CD (5%) 20 T-notes 3 months (7.25%) 80 7 year fixed rate Subordinated debt (8.55%) 150 T-notes two-year (7.50%) 60 Equity 25 T-notes 10-year (8.96%) 100 Corporate bonds (>5 years to maturity) 25 Total assets 355 Total liabilities and Equity 355 What is the repricing (funding) gap over the 0-to-6 months maturity bucket?