Question
I havent had my last 5 questions answered. PLEASE answer. e. HCA is the largest private operator of health care facilities in the world with
I havent had my last 5 questions answered. PLEASE answer.
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 $31.6 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?
HCA INC. INCOME STATEMENT (\$ millions) Sales Cost of Goods Sold Gross Profit Depreciation Operating Profit Interest Expense Non-Operating Income/Expense Pretax Income Total Income Taxes Minority Interest Net Income \begin{tabular}{|r|r|r|r|r|} \hline \multicolumn{1}{|c|}{2005} & \multicolumn{1}{|c|}{2006} & \multicolumn{1}{|c|}{2007} & \multicolumn{1}{|c|}{2008} & \multicolumn{1}{|c|}{2009} \\ \hline 24,455 & 25,477 & 26,858 & 28,374 & 30,052 \\ \hline 20,391 & 21,448 & 22,480 & 24,023 & 24,826 \\ \hline 4,064 & 4,029 & 4,378 & 4,351 & 5,226 \\ \hline 1,374 & 1,391 & 1,426 & 1,416 & 1,425 \\ \hline 2,690 & 2,638 & 2,952 & 2,935 & 3,801 \\ \hline 655 & 955 & 2,215 & 2,021 & 1,987 \\ \hline 412 & 179 & 661 & 256 & 188 \\ \hline 2,327 & 1,862 & 1,398 & 1,170 & 2,002 \\ \hline 725 & 625 & 316 & 268 & 627 \\ \hline 178 & 201 & 208 & 229 & 321 \\ \hline 1,424 & 1,036 & 874 & 673 & 1,054 \\ \hline \end{tabular}
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