What was wallace total long-term debt and total liabilities

Assignment Help Financial Management

Reference no: EM131320495

At year-end 2015, Wallace Landscaping’s total assets were $1.2 million and its accounts payable were $325,000. Sales, which in 2015 were $2.5 million, are expected to increase by 15% in 2016. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $440,000 in 2015, and retained earnings were $300,000. Wallace has arranged to sell $85,000 of new common stock in 2016 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2016. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 3%, and 55% of earnings will be paid out as dividends.

What was Wallace's total long-term debt in 2015? Round your answer to the nearest dollar. $

What were Wallace's total liabilities in 2015? Round your answer to the nearest dollar. $

How much new long-term debt financing will be needed in 2016? (Hint: AFN - New stock = New long-term debt.) Round your answer to the nearest dollar. Do not round intermediate calculations. $

Reference no: EM131320495

Questions Cloud

Which bond would you generally expect to have highest yield : Which bond would you generally expect to have the highest yield?

Discretion is referred to as being which type of bond : A bond that can be paid off early at the issuer's discretion is referred to as being which type of bond? Par value. Callable. Senior. Subordinated. Unsecured.

Business math handbook that accompanies the course textbook : Assuming that you have the business math handbook that accompanies the course? (sorry I have never done this before so I am not sure what you have?)The book is Practical Business Math Procedures Ron Swift earned $1500 last week. Using the tables in t..

What is implicit interest in dollars for first year of bond : The nominal rate of return on the bonds of Stu's Boats is 10.25 percent. The real rate of return is 3.0 percent. What is the rate of inflation? A zero coupon bond with a face value of $1,000 is issued with an initial price of $455.50. The bond mature..

What was wallace total long-term debt and total liabilities : At year-end 2015, Wallace Landscaping’s total assets were $1.2 million and its accounts payable were $325,000. Sales, which in 2015 were $2.5 million, are expected to increase by 15% in 2016. Total assets and accounts payable are proportional to sale..

Operating exposure can be defined : Operating exposure can be defined as: the future home currency values of the firm's assets and liabilities the extent to which the firm's operating cash flows would be affected by random changes in exchange rates the sensitivity of realized domestic ..

Additional funds needed for the coming year : Broussard Skateboard's sales are expected to increase by 15% from $7.8 million in 2015 to $8.97 million in 2016. Its assets totaled $3 million at the end of 2015. Broussard is already at full capacity, so its assets must grow at the same rate as proj..

How much does a share of preferred stock cost : E-Eyes.com just issued some new preferred stock. The issue will pay an annual dividend of $26 in perpetuity, beginning 15 years from now. If the market requires a return of 4 percent on this investment, how much does a share of preferred stock cost t..

What is bea unlevered beta before restructuring : Optimal Capital Structure with Hamada Beckman Engineering and Associates (BEA) is considering a change in its capital structure. BEA currently has $20 million in debt carrying a rate of 6%, and its stock price is $40 per share with 2 million shares o..

User Account

All Pages