As the chief financial officer of Adirondack Designs, you have the following information:
Next year’s expected net income after tax but before
    new financing .............................................................................................. $42 million
Sinking-fund payments due next year on the
    existing debt ............................................................................................... $15 million
Interest due next year on the existing debt ............................................... $10 million
Common stock price, per share ..................................................................  $28.00
Common shares outstanding .....................................................................     20 million
Company tax rate .........................................................................................     30%

a. Calculate Adirondack’s times-interest-earned ratio for next year assuming the firm raises $50 million of new debt at an interest rate of 4 percent.

b. Calculate Adirondack’s times-burden-covered ratio for next year assuming annual sinking-fund payments on the new debt will equal $5 million.

c. Calculate next year’s earnings per share assuming Adirondack raises the $50 million of new debt.

d. Calculate next year’s times-interest-earned ratio, times-burden-covered ratio, and earnings per share if Adirondack sells 2 million new shares at $25 a share instead of raising new debt.