Next year's expected net income after tax but before new financing Sinking-fund payments due next year on the existing debt Interest due next year on the existing debt Common stock price, per share Common shares outstanding Company tax rate $ 48 million $ 23 million $ 18 million $ 32.0 28 million 40% a. Calculate Adirondack's times-interest-earned ratio for next year assuming the firm raises $58 million of new debt at an of 3 percent. b. Calculate Adirondack's times-burden-covered ratio for next year assuming annual sinking-fund payments on the new $4.5 million
Next year's expected net income after tax but before new financing Sinking-fund payments due next year on the existing debt Interest due next year on the existing debt Common stock price, per share Common shares outstanding Company tax rate $ 48 million $ 23 million $ 18 million $ 32.0 28 million 40% a. Calculate Adirondack's times-interest-earned ratio for next year assuming the firm raises $58 million of new debt at an of 3 percent. b. Calculate Adirondack's times-burden-covered ratio for next year assuming annual sinking-fund payments on the new $4.5 million
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter10: Forecasting Financial Statement
Section: Chapter Questions
Problem 8QE
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