Problem 6. As of the end of 2022, Mindorosas Inc. had total assets of P375,000 and equity of P206,250. For 2022. its budget for capital investment projects is P62,500. To finance a portion of the capital budget the company may borrow from a bank which set a condition that the loan would be approved provided the 2022 debt-to-equity ratio should be the same as the debt-to- equity ratio in 2021.
Problem 6. As of the end of 2022, Mindorosas Inc. had total assets of P375,000 and equity of P206,250. For 2022. its budget for capital investment projects is P62,500. To finance a portion of the capital budget the company may borrow from a bank which set a condition that the loan would be approved provided the 2022 debt-to-equity ratio should be the same as the debt-to- equity ratio in 2021.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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How much debt should be incurred/settled to satisfy the banks condition?
Transcribed Image Text:Problem 6. As of the end of 2022, Mindorosas Inc. had total assets of P375,000 and equity of
P206,250. For 2022. its budget for capital investment projects is P62,500. To finance a portion of
the capital budget the company may borrow from a bank which set a condition that the loan
would be approved provided the 2022 debt-to-equity ratio should be the same as the debt-to-
equity ratio in 2021.
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