Shares of preferred stocks with promised preferred dividend

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Reference no: EM131032239

You are given with the following information of a public firm Banana Kingdom. The firm has issued 30 millions shares of common stock with current market price as $35/per share, the expected dividend is $4.50/per share, 500,000 shares of preferred stocks with promised preferred dividend and preferred stock price as $2.50/per share and $17/per share, respectively. The firm also issued 1 million 8%-coupon bonds with $1,000 face value that pays the coupons semi-annually. The current bond price is $920/per bond. The bonds are expected to mature at 2020. Balance Sheet (in millions) 2013 2014 2015 Assets Cash 230 210 970 Marketable securities 50 100 0 Accounts Receivable 1420 1350 1300 Inventory 1260 1578 1450 Plant, Building, and Equipments (net) 2873 1205 990 Investments in affiliates 0 430 1329 Total Assets 5833 4873 6039 Liabilities Short-term debts 107 130 1030 Advances from customers 421 326 534 Accounts payable 685 792 657 Interest payable 75 98 62 Tax payable 147 120 128 Other Accrued Expenses 20 15 35 Bonds payable 3025 1976 1450 Stockholders' Equity Common stock 1001 1201 1875 Additional paid-in capital 74 156 144 Retained earning 278 59 124 Total liabilities and equities 5833 4873 6039 Income Statement(in millions) 2002 2003 2004 Net Sales 4629 4418 4983 Cost of Goods Sold 2215 3109 2310 Selling and General Expenses 771 812 759 Depreciation Expense 210 298 284 Interest Expense 97 109 121 Income Tax Expense 175 137 254 Net Income 1161 ( 47) 1255 Provide your ratio analysis and explain the results.

Reference no: EM131032239

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