An investor is considering investing in the long-term bonds and common stock of Companies M and N.

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An investor is considering investing in the long-term bonds and common stock of Companies M and N. Both firms operate in the same industry. Both also pay a dividend per share of $8 and have a yield of 10 percent on their long-term bonds. Other data for the two firms are as follows:


An investor is considering investing in the long-term bonds and


Compute the debt to equity, interest coverage, and price/earnings (P/E) ratios, as well as the dividends yield, and comment on the results. (Round computations to one decimalplace.)

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Principles Of Financial Accounting

ISBN: 9780538755160

11th Edition

Authors: Belverd E Needles, Marian Powers

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