Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Question - The StayDry Umbrella Corporation will have an EBIT of $100,000 if there is a normal amount of rain this year. But if there is a drought, they will have an EBIT of only $50,000. The interest rate on debt is 10%, and the tax rate is 35%. The company does not pay any preferred dividends.
1. If StayDry has zero debt and 50,000 outstanding shares, what will its EPS (earnings per share) be if there is normal rain? What will its EPS be if there is a drought? What is its DFL (degree of financial leverage)?
2. Now suppose StayDry has decided to take on $300,000 in debt and has used these funds to buy back half of the outstanding shares so now there are only 25,000 outstanding shares. What is the new EPS and DFL for both normal rain and drought?
3. Based on your answers to a) and b) above, what are the trade-offs management has to make between zero debt or $300,000 in debt? What are the benefits and disadvantages of taking on this debt?
Prepare the journal entry on October 31, 2016, to record the first interest payment and the amortization of the premium/discount
Prepare a multiple-step income statement for the year ended December 31, 2014. Compute the gross margin percentage and net profit margin ratio
The patent was acquired in January 2015 and has a useful life of 10 years. The franchise was acquired in January 2012 and also has a useful life of 10 years. Prepare journal entries to record the transactions above
You should justify your choices in terms of the chosen industry/sector on the grounds of innovation, competitive advantage and, company's sustained growth and survival. Your budged is £150,000 (BP).
On January 1, 2011, the Taylor Company adopted the dollar-value LIFO method. The inventory value for its one inventory pool on this date was $400,000. Inventory data for 2011 through 2013 are as follows:
Prepare and determine Pass the necessary journal entries in the books of XYZ Ltd. and also show the Balance sheet. XYZ Ltd. issued 1, 50,000 equity shares
Adams, Inc., pays its employees' weekly wages in cash. A supplementary payroll sheet that lists the employees' names and their earnings for a certain week is shown below.
Which rules of professional conduct should Ryan consider in deciding on a course of action? Explain. What are Ryan's ethical obligations in this matter
Determine if Gonzales, the buyer, qualifies for a cash discount, and who pays for shipping, Gonzales or Coleman. Does the buyer Gonzales qualify for discount
He will graduate from high school in five years. Roughly how much will Bill need to save for one-year's tuition to account for an annual rate of inflation of 3%
Brecker Company's incremental borrowing rate is 12% a year (1% a month). Emporia's implicit rate is unknown.
Calculate the volume of sales required to achieve an operating profit of R20 000. Would you recommend an advertising programme costing
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd