Question

Refer to the following financial data of Fox Industries Ltd.:


Required:
a. Compute the (1) earnings coverage ratio for Year 7, and (2) average earnings coverage ratio for the five-year period Year 3 through Year 7 (inclusive), separately on the first mortgage bonds and on the sinking fund debentures at the end of Year 7.
b. Compute the long-term debt to equity ratio as of December 31, Year 7, and identify the proportion of equity rep resented by shares senior to common shares.
c. Assuming a 50% income tax rate, calculate the (1) earnings coverage ratio for Year 7, and (2) average earnings coverage ratio for the five-year period Year 3 through Year 7 (inclusive), on the $1.10 cumulative redeemable preferred shares at the end of Year 7.
d. Assuming a 50% income tax rate and full conversion of the Class A shares, calculate earnings per common share for the end of Year7.


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  • CreatedJanuary 22, 2015
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