Comparative Analysis

Required

1. Compute the debt-to-equity ratio for Apple and Googlefor both the current year and the prior year.

2. Use the ratios you computed in part 1 to determine which company's financing structure is least risky. Assume an industry average of 0.44 for debt-to-equity.

Ethics Challenge

Required

1. Do you think the actions of the politians and the bankers in this situation are ethical?

2. In terms of risk, how do the tax-exempt securities used to pay for the building compare to a conventional municipal bond issued by Traverse County.

COMPARATIVE ANALYSIS A3 BTN 10-2 Key figures for Apple and Google follow APPLE GOOGLE Apple Google Prior Year $93,798 22,083 71,715 Current Year Prior Year Current Year ($ mllilons) Total assets. Total labilities Total equity $207,000 83.451 123,549 $176,064 57,854 118,210 $110,920 23.611 87.309 Required 1. Compute the debt-to-equity ratios for Apple and Google for both the current year and the pior vear 2. Use the ratios you computed in part 1 to determine which company's financing structure is least risky. Assume an industry average of 0.44 for debt-to-equity ETHICS CHALLENGE C4 A1 BTN 10-3 Traverse County needs a new county government building that would cost $10 million. The politicians feel that voters will not approve a municipal bond issue to fund the building since it would increase taxes. They opt to have a state bank issue $10 million of tax-exempt securities to pay for the building construction. The county then will make yearly lease payments (of principal and interest) to repay the obligation. Unlike conventional municipal bonds, the lease payments are not binding obligations on the county and, therefore, require no voter approval Required 1. Do you think the actions of the politicians and the bankers in this situation are ethical? 2. In terms of risk, how do the tax-exempt securities used to pay for the building compare to a conventional municipal bond issued by Traverse County