You work for a public company that has relied heavily on debt financing in the past and is now considering a preferred stock issuance to reduce its debt-to-assets ratio. Debt-to-assets is one of the key ratios in your company’s loan covenants. Should the preferred stock have a fixed annual dividend rate or a dividend that is determined yearly? In what way might this decision be affected by IFRS?
Answer to relevant QuestionsJust prior to filing for bankruptcy protection in 2009, General Motors asked its bondholders to exchange their investment in GM’s bonds for GM stock. The bondholders rejected this proposal. Why might GM have proposed this ...Nicole has been financing Nicole’s Getaway Spa (NGS) using equity financing. Currently NGS has authorized 100,000 no-par preferred shares and 200,000 $ 2 par common shares. Outstanding shares include 50,000 preferred ...On January 2, Daniel Harrison contributed $ 20,000 to start his business. At the end of the year, the business had generated $ 30,000 in sales revenues, incurred $ 18,000 in operating expenses, and distributed $ 5,000 for ...Sturdy Stone Tools, Inc., announced a 100 percent stock dividend. Determine the impact (increase, decrease, no change) of this dividend on the following: 1. Total assets. 2. Total liabilities. 3. Common stock. 4. Total ...Swimtech Pools Inc. (SPI) reported the following in its financial statements for the quarter ended March 31, 2015. During the quarter ended March 31, SPI reported Net Income of $ 5,000 and declared and paid cash dividends ...
Post your question