As the chief financial officer of Cascade Designs, you have the following information:...

As the chief financial officer of Cascade Designs, you have the following information:

Next year’s expected net income after tax but before new financing $70 million

Sinking-fund payments due next year on the existing debt $20 million

Interest due next year on the existing debt $15 million

Common stock price, per share $40.00

Common shares outstanding 25 million

Company tax rate 30%

a. Calculate Cascade’s times-interest-earned ratio for next year assuming the firm raises $70 million of new debt at an interest rate of 6 percent.

b. Calculate Cascade’s times-burden-covered ratio for next year assuming annual sinking-fund payments on the new debt will equal $7 million.

c. Calculate next year’s earnings per share assuming Cascade raises the $70 million of new debt.

d. Calculate next year’s times-interest-earned ratio, times-burdencovered ratio, and earnings per share if Cascade sells 2 million new shares at $35 a share instead of raising new debt.