Fill in the table using the following information. Assets required for operation: $10,000 Firm A uses only equity financing Firm B uses 40% debt with an 8% interest rate and 60% equity Firm C uses 50% debt with a 12% interest rate and 50% equity Firm D uses 50% preferred stock financing with a dividend rate of 12% and 50% equity financing Earnings before interest and taxes: $1,500 If your answer is zero, enter "0". Round your answers for monetary values to the nearest cent. Round your answers for percentage values to one decimal place. B D Debt Preferred stock Common stock $ 2$ $1,500.00 $1,500.00 $1,500.00 $1,500.00 Earnings before interest and taxes Interest expense $ $ 2$ Earnings before taxes 2$ Taxes (40% of earnings) 5 Preferred stock dividends $ Income available to common stockholders $ Return on common stock % % % LLL LLL LL %24 %24 %24 %24 LLL %24 %24 %24 %24

Fill in the table using the following information. Assets required for operation: $10,000 Firm A uses only equity financing Firm B uses 40% debt with an 8% interest rate and 60% equity Firm C uses 50% debt with a 12% interest rate and 50% equity Firm D uses 50% preferred stock financing with a dividend rate of 12% and 50% equity financing Earnings before interest and taxes: $1,500 If your answer is zero, enter "0". Round your answers for monetary values to the nearest cent. Round your answers for percentage values to one decimal place. B D Debt Preferred stock Common stock $ 2$ $1,500.00 $1,500.00 $1,500.00 $1,500.00 Earnings before interest and taxes Interest expense $ $ 2$ Earnings before taxes 2$ Taxes (40% of earnings) 5 Preferred stock dividends $ Income available to common stockholders $ Return on common stock % % % LLL LLL LL %24 %24 %24 %24 LLL %24 %24 %24 %24

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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