Solution-The trustee has formulated a less leveraged

The trustee has formulated a less leveraged capital

Reference no: EM13573944

Debt/Equity Ratio. The present capital structure of Jones Corporation is shown below.

Debentures	$1,200,000
Collateral bonds	2,800,000
Preferred stock	700,000
Common stock	2,600,000
Total	$7,300,000

There is a high financial leverage position:

Debt/Equity=$4,000,000/$3,300,000=1.21

The business is worth $4.7 million as a going concern. The trustee has formulated a less leveraged capital structure having a total capital of $4.7 million as follows:

Debentures	$ 800,000
Collateral bonds	1,500,000
Income bonds	1,300,000
Preferred stock	400,000
Common stock	700,000
Total	$4,700,000

What is the new debt/equity ratio?

Reference no: EM13573944

Questions Cloud

Assume there is a well-financed one-year-old company in the : assume there is a well-financed one-year-old company in the biotech industry that is concentrating on developing

Sturm corporation earns 8 on an investment that will return : 1. jack birch invested his inheritance at 4 annual interest and left the money invested without withdrawing any of the

O the other hand your friend knows that she will not be : a friend has an elderly mother who lives in a house adjacent to her church. the church is growing and would welcome

Hepburn company bought a copyright for 150100 on january 1 : 1. cramer company sold 5-year 6 bonds on october 1 2013. the face amount of the bonds was 185000 while the issue price

The trustee has formulated a less leveraged capital : debtequity ratio. the present capital structure of jones corporation is shown below.debentures1200000collateral

Given your resource schedule compute the early late and : given your resource schedule compute the early late and slack times for your project. which activities are now

What was the total amount of new money raised what was the : in 1998 the pandora box company made a rights issue at 5 a share of one new share for every four shares held. before

Purchased 20 1000 10 year 6 par bonds from flier inc for : beauty corp has an investment portfolio in which they keep investments in equity securities and debt instruments. they

You have been hired to design an advertisement for a : you have been hired to design an advertisement for a gubernatorial candidate in your state. your ad may support or

User Account

All Pages

The trustee has formulated a less leveraged capital

Reference no: EM13573944

Reference no: EM13573944

Questions Cloud

Reviews

Write a Review

Finance Basics Questions & Answers

Financial reporting and analysis

A report on financial accounting

Describe the types of financial ratios

Differences between sole proprietorship and corporation

Prepare a cash budget statement

What are the implied interest rates

State pricing theory and no-arbitrage pricing theory

Small business administration

Effect of financial leverage

Evaluate the basis for the payment to the lender

Importance of opps, ipps, mpfs and dmepos

Time value of money

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT