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As the chief financial officer of Adirondack Designs, you have the following information: Next year's expected net income after tax but before new financing
As the chief financial officer of Adirondack Designs, you have the following information: 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 $ 44 million $19 million $14 million $ 30.0 24 million 40% a. Calculate Adirondack's times-interest-earned ratio for next year assuming the firm raises $54 million of new debt at an interest rate of 3 percent. b. Calculate Adirondack's times-burden-covered ratio for next year assuming annual sinking-fund payments on the new debt will equal $6.5 million. c. Calculate next year's earnings per share assuming Adirondack raises the $54 million of new debt. d. Calculate next year's times-interest-earned ratio, times-burden-covered ratio, and earnings per share if Adirondack sells 1.9 million new shares at $29 a share Instead of raising new debt. Note: Do not round intermediate calculations. Round "Earnings per share" answers to 2 decimal places and other answers to 1 decimal place. a Times interest earned b Times burden covered C Earnings per share d Times interest earned d Times burden covered d Earnings per share
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