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The Connecticut Computer Company has the selected financial results shown below. 15% Debt 40% Debt 75% Debt Debt $19,500 Equity 110,500 Total Capital $130,000 Shares@
The Connecticut Computer Company has the selected financial results shown below.
15% Debt | 40% Debt | 75% Debt | |
Debt | $19,500 | ||
Equity | 110,500 | ||
Total Capital | $130,000 | ||
Shares@ $5 | 22,100 | ||
EBIT | $8,000 | ||
Interest (15%) | 2,925 | ||
EBT | $5,075 | ||
Tax (40%) | 2,030 | ||
Net Income | $3,045 | ||
ROE | |||
EPS |
The company is considering a capital restructuring to increase leverage from its present level of 15% of capital.
- Reconstruct the three-column chart assuming Connecticut's EBIT remains at $8,000. Round ROE to one decimal place. Round EPS to two decimal places. Use a minus sign to indicate negative answers. If an amount is zero, enter "0".
15% Debt 40% Debt 75% Debt Debt $19,500 $ $ Equity 110,500 Total Capital $130,000 $ $ Shares@ $5 22,100 EBIT $8,000 Interest (15%) 2,925 EBT $5,075 $ $ Tax (40%) 2,030 Net Income $3,045 $ $ ROE % % % EPS $ $ $
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