Has anyone read the Continental Carriers, Inc case study and can help answer the following questions:

A. Use data from Exhibit 1 to show how Continental Carriers has performed over the 1982 1988 period. Has stock price kept pace with EPS?

B. How does Continental Carriers currently use debt? (Exhibit 2)

C. Reproduce and explain Exhibit 3 (ignore sinking fund payment).

1. Why do the stock lines for the stock plan and the debt plan have different slopes?

2. How much EBIT is required for EP S to be higher under the bond plan?

3. Considering Continental Carriers earning history (Exhibit 1) which plan do you recommend? (Consider both the mean and volatility of earnings.)

4. Does the desire of Continental Carriers to maintain a $1.50 dividend affect this decision

D. What is the best option for CCI to raise capital, explain.

E. Do you recommend that Continental Carriers acquire Midland Freight