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Questions -
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.
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)?
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?
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 journal entries for Terrier Company to record the Payment of interest and discount/premium amortization (under the interest method) on June 30
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Furthermore, and much after the fact, you discover that old medical equipment was sold to an unrelated party for $75,000 cash. Provide a journal entry to calculate the gain on sale and adjust the fixed asset and accumulated depreciation accounts
Pat's Custom Jewelry sells a single product. 700 units were sold resulting in $7,000 of sales revenue, Calculate contribution margin per unit
How members might transfer their interests, and how they will raise money for their venture. Give your recommendation of the form you suggest and state why.
The average interest rate for the period from April 01, 2016 to December 31, 2016 was US$1 = Cdn$1.38. Prepare the journal entry to record the loan on Jan
from the following information for alfred industries compute the overhead spending variance and the volume
Compute the under- or overallocated manufacturing overhead for each department and for the Dover plant as whole
A manufacturer reported an inventory turnover ratio of 8.6 during 2007. Will the inventory turnover ratio increase or decrease during 2008
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