In the case, Rebeli Press obtained $50,000 of financing by selling stock to Rebecca and Eli, and also borrowed $100,000 at 5%

interest from their friends and family. Assume that instead of lending money, these family and friends had bought stock. In this case, the company would have had less liabilities and less interest expense. Instead of owning all the common stock, Rebecca and Eli would, together, own one third of the stock. Using the Rebeli financial statements, compute what the following figures would be, assuming that the family and friends bought stock instead of loaning money.

You should also assume that all the income was distributed as dividends at the end of the year.

A. Total operating income B. Total interest expense C. Net income D. Dividends that pertain to Rebecca and Eli, together E. Shareholders’ equity at the end of the year F. Return on common equity G. Return on assets H. Ratio of liabilities to equity