Question
Your company's summarized financial information for the beginning and projected end of the current year is as follows: Beginning of the Year End of the
Your company's summarized financial information for the beginning and projected end of the current year is as follows:
| | Beginning of the Year | End of the Year (projected) |
| Assets | $90,000 | $100,000 |
| Liabilities | 30,000 | 30,000 |
| Equity | 60,000 | 70,000 |
| Net Income | | 15,000 |
Your company is considering issuing 30 bonds at the end of the year (December 31st). The bonds will pay 8% interest semi-annually for 10 years and the market rate for similar bonds is 5%. Therefore, the total bond proceeds are $37,015.12. Calculate the following ratios with and without the bond issue.
Review question:
How much did the company pay in dividends this year (if any)? The company did not issue or repurchase any stock during the year.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Compute ROA ROE debt ratio and DebtEquity ratio when bonds are not issued using MS Excel as follows ...
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Step: 3
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Financial Accounting
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
3rd edition
9780077506902, 78025540, 77506901, 978-0078025549
