Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Can you please answer parts E- G Can you please answer parts E- G Chapter 6 Problem 14 a. What were HCA's liabilities-to-assets ratios and
Can you please answer parts E- G
Can you please answer parts E- G
Chapter 6 Problem 14 a. What were HCA's liabilities-to-assets ratios and times-interest-earned ratios in the years 2005 through 2009? b. What percentage decline in EBIT could HCA have suffered each year between 2005 and 2009 before the company would have been unable to make interest payments out of operating earnings, where operating earnings is defined as EBIT? c. How volatile have HCA's cash flows been over the period 2005 - 2009? d. Calculate HCA's return on invested capital (ROIC) in the years 2005 - 2009. e. HCA is the largest private operator of health care facilities in the world with hundrd of facilities in over 20 states. In 2006, private equity buyers took the company private in a S31.6 billion acquisition. In broad terms how costly do you think financial distress would be to HCA if it began to appear the company might be having difficulty servicing its debt? Why? f. In late 2010 HCA announced an intended dividend recapitalization in which it would pay a $2 billion dividend to shareholders financed in large part by a $1.53 billion bond offering. At an interest rate of 6 percent, how would the added debt have affected HCA's times-interest-earned ratio in 2009? g. Please comment on HCA's capital structure. Is its 2009 debt level prudent? Is it smart to add another S1.53 billion to this total? Why, or why notStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started