Problem 20-00 Fill in the table using the following information Assets required for operation: 511,000 um A uses only equity financing Firm Buses 40% debt with an 8% interest rate and 60%uty Fim Cuses 50% debt with a 10% interest rate and 50% outy Fum Duses 50% preferred stock financing with a dividend rate of 10% and 50% uity financing Earnings before interest and taxes: $1,100 If your answer is zero, entero Round your answers for monetary values to the nearest cent. Round your answers for percentage values to one decimal place A 3 C D $ 5 3 3 Preferred stock $ 5 5 $ Common stock S $ $ $ Earnings before interest and taxes $1,100.00 Interest expense $1,100.00 $1,100.00 $1,100.00 $ 5 Estnings before taxes 5 5 Taxes (40% rings) 3 5 $ S $ Preferred stock dividends $ 5 Income table to common stockholders $ 5 $ Datum on common stock What happens to the common stockholders return on tys the amount of debt creates? Why is the rate of interest rate in the him lower when the fim se pred stock instead of detit? Other things equal, the return on common to the bimestnancol leverages them becomes inancally love tv cat the rate of were will increase the return is lower when the firmes preferred stockstead of debt because the hot tax deducties oposed to the Which type of financing involves less risk for them Assuming a comparable Jessy the uch Problem 20-00 Fill in the table using the following information Assets required for operation: 511,000 um A uses only equity financing Firm Buses 40% debt with an 8% interest rate and 60%uty Fim Cuses 50% debt with a 10% interest rate and 50% outy Fum Duses 50% preferred stock financing with a dividend rate of 10% and 50% uity financing Earnings before interest and taxes: $1,100 If your answer is zero, entero Round your answers for monetary values to the nearest cent. Round your answers for percentage values to one decimal place A 3 C D $ 5 3 3 Preferred stock $ 5 5 $ Common stock S $ $ $ Earnings before interest and taxes $1,100.00 Interest expense $1,100.00 $1,100.00 $1,100.00 $ 5 Estnings before taxes 5 5 Taxes (40% rings) 3 5 $ S $ Preferred stock dividends $ 5 Income table to common stockholders $ 5 $ Datum on common stock What happens to the common stockholders return on tys the amount of debt creates? Why is the rate of interest rate in the him lower when the fim se pred stock instead of detit? Other things equal, the return on common to the bimestnancol leverages them becomes inancally love tv cat the rate of were will increase the return is lower when the firmes preferred stockstead of debt because the hot tax deducties oposed to the Which type of financing involves less risk for them Assuming a comparable Jessy the uch
