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I need help asap!! The statement of financial position as of December 31, 2020, for Taube Corporation follows: (all amounts in thousands) Assets Liabilities and
I need help asap!!
The statement of financial position as of December 31, 2020, for Taube Corporation follows: (all amounts in thousands) Assets Liabilities and Shareholders' Equity Current assets $61,000 Current liabilities $26,000 Non-current assets 107,000 Long-term liabilities 45,000 Shareholders' equity 97,000 Total liabilities and Total assets $168,000 shareholders' equity $168,000 The company's management is evaluating a couple of options to finance the acquisition of new equipment with a cost of $32 million. Taube has a cash balance of $19 million as of December 31, 2020. Determine the debt to equity ratio and net debt as a percentage of total capitalization ratio. Assume that only the company's long-term liabilities are interest bearing. (Round answers to 2 decimal places, eg. 1.25.) Debt to Equity :1 Net Debt as a Percentage of Total Capitalization :1 e Textbook and Media Taube is considering borrowing $32 million by taking out a six-year bank loan that carries 10% interest payable semi-annually. Determine the company's debt to equity and debt as a percentage of total capitalization ratios if it decides to borrow the money and purchase the equipment. (Round answers to 2 decimal places, eg, 1.25.) Debt to Equity :1 Net Debt as a Percentage of Total Capitalization :1 eTextbook and Media As an alternative to the bank loan, management is considering issuing $32 million six-year bonds. The bonds pay 3% interest semi- annually and would be issued at 90.61 to yield 8%. Determine the company's long-term debt to equity and debt as a percentage of total capitalization ratios if it decides to borrow money using bonds and purchase the equipment. (Round answers to 2 decimal places, eg, 1.25.) Debt to Equity :1 Net Debt as a Percentage of Total Capitalization :1 e Textbook and Media Which of options "bank loan" (b) or "bonds" (c) is the better option for Taube and why? The would be a better option as they would have a e Textbook and MediaStep by Step Solution
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