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Can you please help with these questions? Thank you 1)Simmen Inc must decide how to finance a $60 million investment in 2016. For 2016, calculate
Can you please help with these questions? Thank you
1)Simmen Inc must decide how to finance a $60 million investment in 2016. For 2016, calculate its times-burden-covered ratio if the firm chooses to raise the fund need by issuing $60 million in new debt at 10% interest rate. Simmen Inc. Dec 2015 selected Information (in million $) Expected EBIT (2016) $1,000 Sinking-fund payments due next year on existing debt $20 Interest due next year on existing debt $12 Company tax rate 40% Common stock price per share $30 Common share outstanding 20 million 11.05 12.38 19.48 25.06 29.70 None of the above. 2)Simmen Inc must decide how to finance a $60 million investment in 2016. For 2016, calculate its times-interest earned ratio if the firm chooses to raise the fund need by issuing $60 million in new debt at 10% interest rate. Assume the principal payment on the new debt ($60 million) next year is $10 million. Simmen Inc. Dec 2015 selected Information (in million $) Expected EBIT (2016) $1,000 Sinking-fund payments due next year on existing debt $20 Interest due next year on existing debt $12 Company tax rate 40% Common stock price per share $30 Common share outstanding 20 million 12.05 24.71 35.48 47.06 55.55 None of the above. 3)Please refer to the financial information for Nile Holding. Nile must decide how to finance a $100 million investment. Assume Nile raises $100 million of new debt at the end of 2014, at an interest rate of 7%. a. Calculate the firm's pro forma 2015 times-interest-earned (TIE) ratio. b. Calculate the percentage EBIT can fall (below expected EBIT) before interest coverage dips below 1.0. 4)Simmen Inc must decide how to finance a $60 million investment in 2016. For 2016, calculate the earnings per share (EPS) if the firm chooses to raise the fund need by selling 2 million new shares at $30 a share. Simmen Inc. Dec 2015 selected Information (in million $) Expected EBIT (2016) $1,000 Sinking-fund payments due next year on existing debt $20 Interest due next year on existing debt $12 Company tax rate 40% Common stock price per share $30 Common share outstanding 20 million 10.28 11.39 12.00 26.70 34.00 None of the above. 5)Nile must decide how to finance a $100 million investment. Assume Nile raises $100 million of new debt at the end of 2014, at an interest rate of 7%. a. Assuming Nile must make a $20 million payment on the new debt next year, calculate the firm's times-burden-covered ratio and times-common-covered ratio (i.e., the number of times EBIT could cover interest, principal payments, and dividends). b. Calculate next year's earnings per share assuming Nile raises $100 million of new debt. 6)Nile must decide how to finance a $100 million investment. Calculate next year's times-burden-covered ratio and earnings per share if Nile sells 2 million new shares at $50 a share instead of raising new debt of $100 million 7)Simmen Inc must decide how to finance a $60 million investment in 2016. For 2016, calculate its times-burden-covered ratio if the firm chooses to raise the fund need by selling 2 million new shares at $30 a share. Simmen Inc. Dec 2015 selected Information (in million $) Expected EBIT (2016) $1,000 Sinking-fund payments due next year on existing debt $20 Interest due next year on existing debt $12 Company tax rate 40% Common stock price per share $30 Common share outstanding 20 million 10.03 10.38 11.60 22.06 21.70 None of the above. 8)Simmen Inc must decide how to finance a $60 million investment in 2016. For 2016, calculate its times-burden-covered ratio if the firm chooses to raise the fund need by issuing $60 million in new debt at 10% interest rate. Assume the principal payment on the new debt ($60 million) next year is $10 million. Simmen Inc. Dec 2015 selected Information (in million $) Expected EBIT (2016) $1,000 Sinking-fund payments due next year on existing debt $20 Interest due next year on existing debt $12 Company tax rate 40% Common stock price per share $30 Common share outstanding 20 million 12.05 14.71 15.48 17.06 19.70 None of the above. Question 1 =1000/((12+6)+20/(1-0.4)) Question 4 =E15/22 Question 5 =189.8/((36+7)+(54/(1-0.35))) =189.8/((43+40)+54/(1-0.35)) Question 1 =1000/((12+6)+20/(1-0.4)) Question 4 =E15/22 Question 5 =189.8/((36+7)+(54/(1-0.35))) =189.8/((43+40)+54/(1-0.35))Step by Step Solution
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