In Problem 3.9, suppose the firm wishes to keep its debt-to-equity ratio constant. What is EFN now?
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In Problem 3.9, suppose the firm wishes to keep its debt-to-equity ratio constant. What is EFN now?
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MOOSE TOURS INC. 2015 Statement of Comprehensive Income Sales Costs Other expenses Earnings before interest and taxes Interest expense Taxable income Taxes Net income $929.000 723.000 19.000 $187.000 14,000 $173,000 60,550 $112,450 Dividends Addition to retained earnings S33,735 78,715 MOOSE TOURS INC. Statement of Financial Position as of December 31, 2015 Assets Liabilities and shareholders equity Current assets Current liabilities Cash Accounts receivable Inventory 25,300 Accounts payable 40,700 86.900Total 68,000 17.000 $85,000 158.000 Notes payable Total Fixed assets $152,900 Long-term debt Shareholders equity Net plant and equipment Common stock and paid-in surplus Retained earnings $140,00o 182,900 $322,900 $565,900 $413,000 Total Total liabilities and shareholders' equity Total assets $565.900
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The DE ratio of the company is DE 85000 158000 322900 DE 07526 So the new total debt amount will be New total debt 07526418632 New total debt 315044 T...View the full answer
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Related Book For
Corporate Finance
ISBN: 978-0071339575
7th Canadian Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Gordon Ro
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