Problem Solving. Type your final answer in the space provided The following information pertains to SBA Company
Question:
Problem Solving. Type your final answer in the space provided The following information pertains to SBA Company for year-end 2016.
Earnings before interest and taxes = P 3,000,000
Capital structure consists of the following:
Debts – 1,000 , 15%, P 5,000 value per bond,
Preferred Shares – 12%, 5,000, P1000 par
Ordinary equity shares – 10,000 shares , P100 par
Corporate Tax rate – 32%
For 2016, 60% of Earnings after interest and taxes will be distributed as dividends .
Assume that interest, taxes, dividends are paid annually.
a. Compute for the EAIT.
EAIT= PAnswer
b. Compute for the dividends for preferred shares; for common shares.
Preferred Shares= PAnswer
Common Shares= PAnswer
c. How much of the EAIT were added to retained earnings account.
Additional to Retained Earnings= PAnswer
Equity Asset Valuation
ISBN: 978-0470571439
2nd Edition
Authors: Jerald E. Pinto, Elaine Henry, Thomas R. Robinson, John D. Stowe, Abby Cohen