The statement of financial position as of December 31, 2020, for Taube Corporation follows: (all amounts in thousands) Assets Current assets Non-current assets $62,000 100,000 Liabilities and Shareholders' Equity Current liabilities $25,000 Long-term liabilities 45,000 Shareholders' equity 92,000 Total liabilities and shareholders' equity $162,000 Total assets $162,000 The company's management is evaluating a couple of options to finance the acquisition of new equipment with a cost of $33 million X Your answer is incorrect. Taube has a cash balance of $20 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 0.76 :1 Net Debt as a Percentage of Total Capitalization 0.31 :1 1 eTextbook and Media X Your answer is incorrect. Taube is considering borrowing $33 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, e.g. 1.25.) Debt to Equity 1.12 :1 Net Debt as a Percentage of Total Capitalization 0.43 :1 x Your answer is incorrect. As an alternative to the bank loan, management is considering issuing 533 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 109 Net Debt as a Percentage of Total Capitalization 0.27 -1 e Textbook and Media Your answer is partially correct. Which of options "bank loan"(b) on "bonds" (c) is the better option for Taube and why? The bonds would be a better option as they would have a lower debt to equity e Textbook and Media higher interest rate lower interest rate higher debt to equity lower debt to equity higher net debt as a percentage of total capitalization lower net debt as a percentage of total capitalization The statement of financial position as of December 31, 2020, for Taube Corporation follows: (all amounts in thousands) Assets Current assets Non-current assets $62,000 100,000 Liabilities and Shareholders' Equity Current liabilities $25,000 Long-term liabilities 45,000 Shareholders' equity 92,000 Total liabilities and shareholders' equity $162,000 Total assets $162,000 The company's management is evaluating a couple of options to finance the acquisition of new equipment with a cost of $33 million X Your answer is incorrect. Taube has a cash balance of $20 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 0.76 :1 Net Debt as a Percentage of Total Capitalization 0.31 :1 1 eTextbook and Media X Your answer is incorrect. Taube is considering borrowing $33 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, e.g. 1.25.) Debt to Equity 1.12 :1 Net Debt as a Percentage of Total Capitalization 0.43 :1 x Your answer is incorrect. As an alternative to the bank loan, management is considering issuing 533 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 109 Net Debt as a Percentage of Total Capitalization 0.27 -1 e Textbook and Media Your answer is partially correct. Which of options "bank loan"(b) on "bonds" (c) is the better option for Taube and why? The bonds would be a better option as they would have a lower debt to equity e Textbook and Media higher interest rate lower interest rate higher debt to equity lower debt to equity higher net debt as a percentage of total capitalization lower net debt as a percentage of total capitalization
