Homework Answers
13) e) None of the above
Note: In the absence of any specific information , we are assuming that interest paid only for the additional borrowing in option 1 is asked. Hence, the interest payment for option 1 is PhP 0.8 M.
If we assumed the, total interest payment for exisiting debt and option 1 debt is asked, then the interest payment would be PhP 1.4 M.
Add Answer to:
(13 – 18) Pioneer Company has a 10 Million Pesos in debt outstanding bearing an interest...
Aant Investments Inc. currently has $3.5 million in debt outstanding, bearing in interest rate of 12.3%....
Aant Investments Inc. currently has $3.5 million in debt outstanding, bearing in interest rate of 12.3%. It wishes to finance a $5 million expansion program and is considering five alternatives. Plan Debt 0% 35% 50% Preferred Equity 0% 100% 0% 65% 0% 50% 20% 30% 20% 20% 50% 60% so The preferred stock dividend will be 12% and the price of common stock will be $18 per share. The company currently has 750,000 shares of common stock outstanding and is...
The Lopez-Portillo Company has $10 million in assets, 80 percent financed by debt and 20 percent...
The Lopez-Portillo Company has $10 million in assets, 80 percent financed by debt and 20 percent financed by common stock. The interest rate on the debt is 15 percent, and the stock book value is $10 per share. President Lopez-Portillo is considering two financing plans for an expansion to $15 million in assets. Under Plan A, the debt-to-total-assets ratio will be maintained, but new debt will cost 18 percent! New stock will be sold at $10 per share. Under Plan...
Kaelea, Inc., has no debt outstanding and a total market value of $120,000. Earnings before interest...
Kaelea, Inc., has no debt outstanding and a total market value of $120,000. Earnings before interest and taxes, EBIT, are projected to be $9,200 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 22 percent higher. If there is a recession, then EBIT will be 33 percent lower. The company is considering a $37,000 debt issue with an interest rate of 6 percent. The proceeds will be used to repurchase shares of...
Pendergast, Inc., has no debt outstanding and a total market value of $180,000. Eamings before interest...
Pendergast, Inc., has no debt outstanding and a total market value of $180,000. Eamings before interest and taxes, EBIT, are projected to be $23,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 20 percent higher. If there is a recession, then EBIT will be 30 percent lower. Pendergast is considering a S75,000 debt issue with an interest rate of 7 percent. The proceeds will be used to repurchase shares of stock....
Castle, Inc., has no debt outstanding and a total market value of $250,000. Earnings before interest...
Castle, Inc., has no debt outstanding and a total market value of $250,000. Earnings before interest and taxes, EBIT, are projected to be $42,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 18 percent higher. If there is a recession, then EBIT will be 30 percent lower. The firm is considering a debt issue of $100,000 with an interest rate of 8 percent. The proceeds will be used to repurchase shares...
Castle, Inc., has no debt outstanding and a total market value of $150,000. Earnings before interest...
Castle, Inc., has no debt outstanding and a
total market value of $150,000. Earnings before interest and taxes,
EBIT, are projected to be $28,000 if economic conditions are
normal. If there is strong expansion in the economy, then EBIT will
be 20 percent higher. If there is a recession, then EBIT will be 25
percent lower. The firm is considering a debt issue of $60,000 with
an interest rate of 7 percent. The proceeds will be used to
repurchase shares...
Problem 13-2 EBIT, Taxes, and Leverage [LO 2] Kaelea, Inc., has no debt outstanding and a...
Problem 13-2 EBIT, Taxes, and Leverage [LO 2] Kaelea, Inc., has no debt outstanding and a total market value of $100,000. Earnings before interest and taxes, EBIT, are projected to be $8,400 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 24 percent higher. If there is a recession, then EBIT will be 31 percent lower. The company is considering a $35,000 debt issue with an interest rate of 6 percent. The...
Sunrise, Inc., has no debt outstanding and a total market value of $245,000. Earnings before interest...
Sunrise, Inc., has no debt outstanding and a total market value of $245,000. Earnings before interest and taxes, EBIT, are projected to be $19,000 if economic condition is normal. If there is strong expansion in the economy, then EBIT will be 25 percent higher. If there is a recession, then EBIT will be 40 percent lower. The company is considering a $58,800 debt issue with an interest rate of 8 percent. The proceeds will be used to repurchase shares of...
Kaelea, Inc., has no debt outstanding and a total market value of $82,000. Earnings before interest...
Kaelea, Inc., has no debt outstanding and a total market value of $82,000. Earnings before interest and taxes, EBIT, are projected to be $8,500 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 20 percent higher. If there is a recession, then EBIT will be 35 percent lower. The company is considering a $28,200 debt issue with an interest rate of 7 percent. The proceeds will be used to repurchase shares of...
MassNet Corporation has 10.38 million shares outstanding and debt with interest payments of $1.12 million. What...
MassNet Corporation has 10.38 million shares outstanding and debt with interest payments of $1.12 million. What earnings before interest and tax (EBIT) must the firm have if it were to provide $2 per share to the shareholders? Assume perfect markets. Answer:$ million Place your answer in milions of dollars with two decimal places.
Aant Investments Inc. currently has $3.5 million in debt outstanding, bearing in interest rate of 12.3%. It wishes to finance a $5 million expansion program and is considering five alternatives. Plan Debt 0% 35% 50% Preferred Equity 0% 100% 0% 65% 0% 50% 20% 30% 20% 20% 50% 60% so The preferred stock dividend will be 12% and the price of common stock will be $18 per share. The company currently has 750,000 shares of common stock outstanding and is...
Pendergast, Inc., has no debt outstanding and a total market value of $180,000. Eamings before interest and taxes, EBIT, are projected to be $23,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 20 percent higher. If there is a recession, then EBIT will be 30 percent lower. Pendergast is considering a S75,000 debt issue with an interest rate of 7 percent. The proceeds will be used to repurchase shares of stock....
Castle, Inc., has no debt outstanding and a
total market value of $150,000. Earnings before interest and taxes,
EBIT, are projected to be $28,000 if economic conditions are
normal. If there is strong expansion in the economy, then EBIT will
be 20 percent higher. If there is a recession, then EBIT will be 25
percent lower. The firm is considering a debt issue of $60,000 with
an interest rate of 7 percent. The proceeds will be used to
repurchase shares...
Sunrise, Inc., has no debt outstanding and a total market value of $245,000. Earnings before interest and taxes, EBIT, are projected to be $19,000 if economic condition is normal. If there is strong expansion in the economy, then EBIT will be 25 percent higher. If there is a recession, then EBIT will be 40 percent lower. The company is considering a $58,800 debt issue with an interest rate of 8 percent. The proceeds will be used to repurchase shares of...
Most questions answered within 3 hours.
-
Assume an array list is declared as follows:
int list[100]
and that all other variables have...
asked 12 seconds ago -
Do you believe that as the pool of engineers decrease, or become
in higher demand, that...
asked 8 minutes ago -
A
700 kg car is coasting along a level road, slowing down at an
acceleration of...
asked 16 minutes ago -
find dB IL for a sound with the intensity of 3x10^-13 w/sq meter
with a reference...
asked 17 minutes ago -
Case 7-3: Wentworth Hospital Discussion Questions: essay
paragraph
Is there anything irregular here?
What is your...
asked 20 minutes ago -
1- A) How many milliliters of 0.100 M NaOH are needed to
neutralize 50.00 mL of...
asked 37 minutes ago -
It is determined that a reaction is 1st order in [BrO3-], 1st
order in [Br-] and...
asked 39 minutes ago -
Write a JavaScript program to implement the Least-Squares Linear
Regression algorithm shown below, for an arbitrary...
asked 49 minutes ago -
Determine the solubility of Cadmium in equilibrium with Cadmium
hydroxide, Cd(OH)2, as a function of pH....
asked 53 minutes ago -
When 34.2 grams of strontium reacts with excess molecular
oxygen, how many grams of the product...
asked 1 hour ago -
nformation related to the Berkley Company for the calendar year
2015 follows:
Liabilities, December 31, 2015...
asked 56 minutes ago -
Please help!
A voltaic cell consists of a Mn/Mn2+ anode (E°= -1.18 V) and a
Fe/Fe2+...
asked 1 hour ago