C

Last year, Arbor Corporation reported the following: This year, Arbor is considering whether to issue more debt to fund a $100,000 project or to issue additional shares of common stock. Both options will bring in exactly $100,000. Arbor's current debt contracts contain a debt covenant that requires it to maintain a debto-equity ratio of 2.0 or less. Required: 1. Calculate Arbor's current debt-to-equity ratio. 2. Calculate Arbor's debt-to-equity ratio assuming it funds the project using additional debt. 3. Calculate Arbor's debt-to-equity ratio assuming it funds the project by issuing common stock. LaTanya Corporation is planning to issue bonds with a face value of $100,000 and a coupon rate of 8 percent. The bonds mature in seven years. Interest is paid annually on December 31. All of the bonds will be sold on January 1 of this year. (FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required: Compute the issue (sales) price on January 1 of this year for each of the following independent cases: a. Case A: Market interest rate (annual): 8 percent. b. Case B: Market interest rate (annual): 6 percent. c. Case C: Market interest rate (annual): 9 percent