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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 $45 million $20 million $ 15 million $30.5 25 million. 45% a. Calculate Adirondack's times-interest-earned ratio for next year assuming the firm raises $55 million of new debt at an interest rate of 5 percent. b. Calculate Adirondack's times-burden-covered ratio for next year assuming annual sinking-fund payments on the new debt will equal $6.0 million. a. Times interest earned b. Times burden covered c. Earnings per share d. Times interest earned d. Times burden covered d. Earnings per share c. Calculate next year's earnings per share assuming Adirondack raises the $55 million of new debt. d. Calculate next year's times-interest-earned ratio, times-burden-covered ratio, and earnings per share if Adirondack sells 2.0 million new shares at $28 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.
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