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Please answer in excel formulas Suppose that Papa Bell, Inc.'s, equity is currently selling for $41 per share, with 3.6 million shares outstanding. The firm
Please answer in excel formulas
Suppose that Papa Bell, Inc.'s, equity is currently selling for $41 per share, with 3.6 million shares outstanding. The firm also has 8,000 bonds outstanding, which are selling at 95 percent of par. Assume Papa Bell was considering an active change to its capital structure so as to have a D/E of 0.5. Which type of security (stocks or bonds) would the firm need to sell to accomplish this? E How much would it have to sell? (Enter your answer in dollars not in millions. Do not round intermediate calculations and round your final answer to 2 decimal places.) AB D 7 Share price 41.00 8 Shares outstanding 3,600,000 9 Bonds outstanding 8,000 10 Bond price (% of par) 95.00% 11 Proposed new D/E ratio 0.50 12 8 9 13 14 15 16 Complete the following analysis. Do not hard code values in your calculati not round intermediate calculations. 17 18 19 20 21 22 23 24 25 Current equity ratio Current debt ratio Current D/E ratio Sell bonds or stock? New debt ratio Amount of securities to buy and sellStep by Step Solution
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