Calculate bear times-interest earned ratio

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Reference no: EM131359979

As the Financial vice president for Bear Enterprises, you have the following information:

Expected net income after tax next year before new financing : $60,000,000

Sinking Fund payments due next year on existing debt: $20,000,000

Interest due next year on existing debt $18,000,000

Conpany Tax rate                            25%

Common Stock Price, per share               $17

Common Shares outstanding: 22,000,000

For next year assume the firm raises $60 Million of new debt at an interest rate of 9 percent.

Calculate Bear's EBIT

Calculate Bear's Interest Rate

Calculate Bear's times-interest earned ratio for next year assuming the firm raises $60 Million of new debt at an interest rate of 9 percent.

Calculate Bear's Earnings Per Share for next year assuming the firm raises $60 Million of new debt at an interest rate of 9 percent.

Reference no: EM131359979

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