Pinnacle Medical Goods is embarking on a massive expansion Assume plans call for opening 20 new stores during the next two years. Each store is scheduled to be 30% larger than the company's existing locations offering more terms of inventory and with more abord plays. Management estimates that company operations will provide $10 million of the cash needed for expansion Pinnacle Medical must raise the remaining 18.75 million from outsiders c ondition in the additional de Requirements More ipfo Regu Begin Jorrowing alternative, then enter the amounts to its in dollars instead of millions) 1. Evaluate the effect the two financing tomatives will have on Pinnacle's income and eamings per share two years from now 2. Complete the memo to Pinnacle's management discussing the advantages and disadvantages of borrowing and fining common stock to raise the needed cash. Which method of raising the funds would you recommend? The board of director is considering obtaining the 75 millioner by borrowing at 5% obywing an additional 500,000 shares of common stock. This year the company has med 52 million before W est and taxes and has 500.000 shares of $1. common stock outstanding. The market price of the company's stock is $17.50 per whareAssume that income before interest and taxes is expected to grow by 20% each year for the next two years. The company's marginal income tax rate is 20% Print Done Print Done Pinnacle Medical Goods is embarking on a massive expansion Assume plans cal for opening 20 new wores during the next two years. Each wore is scheduled to be 30% larger than the company's existing locations, offering more tons of tory and with more laborale displays Management that company operations we provide hon of the cash e d for expansion Pinnacle Medical u se the remaining 58 75 million from outsiders Click the icon to view formation on raising the additional funds) Begin by selecting the w e d to the effect of the w aves on net income and shows share where the amount show of the borrowing w h ere the amount Borrow $0.75 milio Alternative Issue 10.000 shares ch tunds would you recommend? Requirement 2. Complete the memoto Penal's management discussing the advantages and disadvantages of borrowing and of sing common stock to as the needed cash Which method of s To: Management of P acie Medical Goods Subject Advantages and disadvantages of borrowing versus issuing to raise cash for expansion The advantages and disadvantages of borrowing for cash for expansion are as follows a box is not used in the leave the box amply do not select a wo) Advantages The advantages and disadvantages of sing so to raise cash for expansion areas o f a bon used in the w ave the box amply do not be Advantages The method of raising funds that I would recommend depends upon the goal of the company in relation to this plan The method of raising funds that I would recommend depends upon the goal of the company in relation to this plan If the company is looking to select an expansion plan that results in a higher earings per share I would recommend to raise cash for expansion. If the company is looking for a safe means of raising cash I would recommend Choose from any list or enter any number in the input fields and then continue to the next question acle Medical Goods is embarking on a massive expansion. Assume plans call for opening 20 new stores durin itory and with more elaborate displays. Management estimates that company operations will provide $1.0 milli Click the icon to view information on raising the additional funds.) the A More Info airem Hearning earning the "in the The board of directors is considering obtaining the $8.75 million either by borrowing at 5% or by issuing an additional 500,000 shares of common stock. This year the company has earned $2 million before interest and taxes and has 500,000 shares of $1-par common stock outstanding. The market price of the company's stock is $17.50 per share. Assume that income before interest and taxes is expected to grow by 20% each year for the next two years. The company's marginal income tax rate is 20%. by Print Done Requirements ning ing tern sing hed 1. Evaluate the effect the two financing alternatives will have on Pinnacle's net income and earnings per share two years from now. 2. Complete the memo to Pinnacle's management discussing the advantages and disadvantages of borrowing and of issuing common stock to raise the needed cash. Which method of raising the funds would you recommend? Print Done Pinnacle Mil Goods is embargona massive Assume a forening 20 news inventory and with more laborated plays Management estimates that company person provide s Click the soon to view information on raising the additional funds) during the o n of the cash d stores wh epansion P o be g ace Medical must an the company's the r ing 58.75 m locations ng more bams of on from outsiders Requirement 1. Evaluate the effect the two financing alternatives will have on Pinnacle's net income and earnings per share two years from now. Begin by selecting the labels nended to analyze the effect of the tomatives on net income and to show comings por share her the expansion Next, the amount to show the foot of the bowing alternative, then enter the amounts to show the effect of the shares of stock alternative For amounts with a balance, make sure to enter in the appropriate column Round the EPS clown to two decimal places Erramounts in dolor instead of millions) Alternative 1 Borrow $0.75 million Issue 500.000 shares Requirement 2. Complete the memoto Pinnacle's management discussing the advantages and disadvantages of borrowing and of issuing common stock to raise the needed cash Which method of raising funds would you recommend? To: Management of Pinnacle Medical Goods Subject: Advantages and disadvantages of borrowing versus issuing stock to raise cash for expansion The advantages and disadvantages of borrowing to raise cash for expansion are as follows: Of a box is not used in the table, leave the box empty do not select a label) Advantages Disadvantages The advantages and disadvantages of issuing stock to raise cash for expansion are as follows: (if a box is not used in the tableave the box amply, do not select a label) Advantages The method of raising funds that I would recommend depends upon the goal of the company in relation to this plan The method of raising and that I would recommend depends on the goal of the company in relation to this plan if the company is looking to select an expansion plan that rests in a higher comings per have I would recommend to cash for expansion of the company is looking for a 'sale' means of ring recommend Pinnacle Medical Goods is embarking on a massive expansion Assume plans call for opening 20 new stores during the next two years. Each store is scheduled to be 30% larger than the company's existing locations offering more terms of inventory and with more abord plays. Management estimates that company operations will provide $10 million of the cash needed for expansion Pinnacle Medical must raise the remaining 18.75 million from outsiders c ondition in the additional de Requirements More ipfo Regu Begin Jorrowing alternative, then enter the amounts to its in dollars instead of millions) 1. Evaluate the effect the two financing tomatives will have on Pinnacle's income and eamings per share two years from now 2. Complete the memo to Pinnacle's management discussing the advantages and disadvantages of borrowing and fining common stock to raise the needed cash. Which method of raising the funds would you recommend? The board of director is considering obtaining the 75 millioner by borrowing at 5% obywing an additional 500,000 shares of common stock. This year the company has med 52 million before W est and taxes and has 500.000 shares of $1. common stock outstanding. The market price of the company's stock is $17.50 per whareAssume that income before interest and taxes is expected to grow by 20% each year for the next two years. The company's marginal income tax rate is 20% Print Done Print Done Pinnacle Medical Goods is embarking on a massive expansion Assume plans cal for opening 20 new wores during the next two years. Each wore is scheduled to be 30% larger than the company's existing locations, offering more tons of tory and with more laborale displays Management that company operations we provide hon of the cash e d for expansion Pinnacle Medical u se the remaining 58 75 million from outsiders Click the icon to view formation on raising the additional funds) Begin by selecting the w e d to the effect of the w aves on net income and shows share where the amount show of the borrowing w h ere the amount Borrow $0.75 milio Alternative Issue 10.000 shares ch tunds would you recommend? Requirement 2. Complete the memoto Penal's management discussing the advantages and disadvantages of borrowing and of sing common stock to as the needed cash Which method of s To: Management of P acie Medical Goods Subject Advantages and disadvantages of borrowing versus issuing to raise cash for expansion The advantages and disadvantages of borrowing for cash for expansion are as follows a box is not used in the leave the box amply do not select a wo) Advantages The advantages and disadvantages of sing so to raise cash for expansion areas o f a bon used in the w ave the box amply do not be Advantages The method of raising funds that I would recommend depends upon the goal of the company in relation to this plan The method of raising funds that I would recommend depends upon the goal of the company in relation to this plan If the company is looking to select an expansion plan that results in a higher earings per share I would recommend to raise cash for expansion. If the company is looking for a safe means of raising cash I would recommend Choose from any list or enter any number in the input fields and then continue to the next question acle Medical Goods is embarking on a massive expansion. Assume plans call for opening 20 new stores durin itory and with more elaborate displays. Management estimates that company operations will provide $1.0 milli Click the icon to view information on raising the additional funds.) the A More Info airem Hearning earning the "in the The board of directors is considering obtaining the $8.75 million either by borrowing at 5% or by issuing an additional 500,000 shares of common stock. This year the company has earned $2 million before interest and taxes and has 500,000 shares of $1-par common stock outstanding. The market price of the company's stock is $17.50 per share. Assume that income before interest and taxes is expected to grow by 20% each year for the next two years. The company's marginal income tax rate is 20%. by Print Done Requirements ning ing tern sing hed 1. Evaluate the effect the two financing alternatives will have on Pinnacle's net income and earnings per share two years from now. 2. Complete the memo to Pinnacle's management discussing the advantages and disadvantages of borrowing and of issuing common stock to raise the needed cash. Which method of raising the funds would you recommend? Print Done Pinnacle Mil Goods is embargona massive Assume a forening 20 news inventory and with more laborated plays Management estimates that company person provide s Click the soon to view information on raising the additional funds) during the o n of the cash d stores wh epansion P o be g ace Medical must an the company's the r ing 58.75 m locations ng more bams of on from outsiders Requirement 1. Evaluate the effect the two financing alternatives will have on Pinnacle's net income and earnings per share two years from now. Begin by selecting the labels nended to analyze the effect of the tomatives on net income and to show comings por share her the expansion Next, the amount to show the foot of the bowing alternative, then enter the amounts to show the effect of the shares of stock alternative For amounts with a balance, make sure to enter in the appropriate column Round the EPS clown to two decimal places Erramounts in dolor instead of millions) Alternative 1 Borrow $0.75 million Issue 500.000 shares Requirement 2. Complete the memoto Pinnacle's management discussing the advantages and disadvantages of borrowing and of issuing common stock to raise the needed cash Which method of raising funds would you recommend? To: Management of Pinnacle Medical Goods Subject: Advantages and disadvantages of borrowing versus issuing stock to raise cash for expansion The advantages and disadvantages of borrowing to raise cash for expansion are as follows: Of a box is not used in the table, leave the box empty do not select a label) Advantages Disadvantages The advantages and disadvantages of issuing stock to raise cash for expansion are as follows: (if a box is not used in the tableave the box amply, do not select a label) Advantages The method of raising funds that I would recommend depends upon the goal of the company in relation to this plan The method of raising and that I would recommend depends on the goal of the company in relation to this plan if the company is looking to select an expansion plan that rests in a higher comings per have I would recommend to cash for expansion of the company is looking for a 'sale' means of ring recommend