Current assets $ 12,000 Current liabilities $ 10,000 Noncurrent assets 70,000 Noncurrent liabilities 52,000 Stockholders' equity 20,000 The company wishes to raise $42,000 in cash and is considering two financing options: Clayton can sell $42,000 of bonds payable, or It can issue additional common stock for $42,000. To help in the decision process, Clayton's management wants to determine the effects of each alternative on its current ratio and debt-to-assets ratio Required a-1. Compute the current ratio for Clayton's management a-2. Compute the debt-to-assets ratio for Clayton's management b. Assume that after the funds are invested, EBIT amounts to $19,300. Also assume the company pays $3,400 in dividends or $3,400 in interest depending on which source of financing is used. Based on a 30 percent tax rate, determine the amount of the increase in retained earnings that would result under each financing option. Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 Reg B Compute the current ratio for Clayton's management. (Round your answers to 2 decimal places.) Currently If bonds are issued I stock is issued Current Ratio to 1 to 1 to 1 Current assets $ 12,000 Current liabilities $ 10,000 Noncurrent assets 70,000 Noncurrent liabilities 52,000 stockholders' equity 20,000 The company wishes to raise $42,000 in cash and is considering two financing options: Clayton can sell $42,000 of bonds payable or it can issue additional common stock for $42,000 To help in the decision process, Clayton's management wants to determine the effects of each alternative on its current ratio and debt-to-assets ratio. Required a-1. Compute the current ratio for Clayton's management 1-2. Compute the debt-to-assets ratio for Clayton's management b. Assume that after the funds are invested, EBIT amounts to $19,300. Also assume the company pays $3.400 in dividends or $3,400 in interest depending on which source of financing is used. Based on a 30 percent tax rate determine the amount of the increase in retained earnings that would result under each financing option Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 ReqB Compute the debt-to-assets ratio for Clayton's management. (Round your percentage answers to 1 decimal place.) Debt to Assets Ratio % Currently If bonds are issued If stock is issued % Current assets $ 12,000 Current liabilities $10,000 Noncurrent assets 70,000 Noncurrent liabilities 52,000 stockholders' equity 20,000 The company wishes to raise $42,000 in cash and is considering two financing options: Clayton can sell $42.000 of bonds payable, or it can issue additional common stock for $42,000. To help in the decision process, Clayton's management wants to determine the effects of each alternative on its current ratio and debt-to-assets ratio Required a-1. Compute the current ratio for Clayton's management a-2. Compute the debt-to-assets ratio for Clayton's management b. Assume that after the funds are invested, EBIT amounts to $19,300. Also assume the company pays $3,400 in dividends or $3,400 in interest depending on which source of financing is used. Based on a 30 percent tax rate, determine the amount of the increase in retained earnings that would result under each financing option Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 Reg B Assume that after the funds are invested, EBIT amounts to $19,300. Also assume the company pays $3,400 in dividends or $3,400 in interest depending on which source of financing is used. Based on a 30 percent tax rate, determine the amount of the increase in retained earnings that would result under each financing option Additional Retained Earnings Bonds Stock