Check my work 15 Clayton Industries has the following account balances: Current assets Noncurrent assets $ 20,000 Current liabilities 80,000 Noncurrent liabilities Stockholders' equity $ 10,000 50,000 40,000 5 bints 04:50:08 The company wishes to raise $40,000 in cash and is considering two financing options: Clayton can sell $40,000 of bonds payable, or it can issue additional common stock for $40,000. To help in the decision process, Clayton's management wants to determine the effects of each alternative on its current ratio and debt-to-assets ratio. eBook Hint Required a-1. Compute the current ratio for Clayton's management. a-2. Compute the debt-to-assets ratio for Clayton's management. b. Assume that after the funds are invested, EBIT amounts to $12,000. Also assume the company pays $4,000 in dividends or $4,000 in interest depending on which source of financing is used. Based on a 30 percent tax rate, determine the amount of the increase in retained earnings that would result under each financing option. Print References Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 Req B Req A1 Reg A2 Req B -58 Compute the current ratio for Clayton's management. (R Current Ratio Currently 2.00 to 1 If bonds are issued to 1 If stock is issued to 1 es 15 Complete this question by entering your answe .5 points Req A1 Req A2 Reg B 8 Compute the debt-to-assets ratio for Clayton's manag 04:49:52 Debt to Assets Ratio eBook % Currently If bonds are issued % If stock is issued % Print US ques DY ering your answers Req A1 Req A2 Reg B 1:49:45 Assume that after the funds are invested, EBIT amounts $4,000 in interest depending on which source of financing the increase in retained earnings that would result under ook Additional Retained Earnings nt Bonds int Stock ences Req A2