QUESTION 31 Shown below are comparative balance sheets and comparative income statements for Miami Publishing Company. Using those comparative statements, answer the following: A. For the year 2019, what is the company's total dollar amount of capital? Of that total capital amount, what percentage is long-term deht? What percentage is preferred stock? What percentage is common equity? B. For the year 2020, what is the company's total dollar amount of capital? Of that total capital amount, what percentage is long-term debt? What percentage is preferred stock? What percentage is common equity? C. For the year 2021, what is the company's total dollar amount of capital? Of that total capital amount, what percentage is long-term debt? What percentage is preferred stock? What percentage common equity? Based on your answers to A, B, and C, which of the following capital structure theories best describes the company's capital structure? Why? Be specific. Modigliani & Miller (M&M) 1958 - no taxes Modigliani & Miller (M&M) 1963 - with taxes Trade-Off Model Miami Publishing Company financial statements D Balance Sheets (in thousands of dollars) 2021 Cash 30 Accounts receivable 200 Inventory 400 Current assets 630 Gross fixed assets 1000 Accumulated depreciation 180 Net fixed assets 820 Totul assets 1450 2020 20 395 510 925 1000 220 780 1705 2019 30 430 640 1100 1650 280 1370 2470 Accounts payable Accruals Notes payable Current liabilities Long-term deht (bonds) Preferred stock Common stock Paid-in capital Retained earnings Total liab & equity 250 200 100 550 500 0 25 75 300 1450 300 260 150 710 500 0 25 75 395 1705 375 315 280 970 700 0 200 100 500 2470 40 Income Statements (in thousands of dollars) 2021 2020 Sales 4000 4800 Operating expenses 3640 4520 Depreciation expense 40 EBIT 320 240 Interest expense 40 50 EBT 280 190 Taxes (40%) 112 76 NI 168 114 2019 5800 5560 60 180 70 110 44 66 QUESTION 31 Shown below are comparative balance sheets and comparative income statements for Miami Publishing Company. Using those comparative statements, answer the following: A. For the year 2019, what is the company's total dollar amount of capital? Of that total capital amount, what percentage is long-term deht? What percentage is preferred stock? What percentage is common equity? B. For the year 2020, what is the company's total dollar amount of capital? Of that total capital amount, what percentage is long-term debt? What percentage is preferred stock? What percentage is common equity? C. For the year 2021, what is the company's total dollar amount of capital? Of that total capital amount, what percentage is long-term debt? What percentage is preferred stock? What percentage common equity? Based on your answers to A, B, and C, which of the following capital structure theories best describes the company's capital structure? Why? Be specific. Modigliani & Miller (M&M) 1958 - no taxes Modigliani & Miller (M&M) 1963 - with taxes Trade-Off Model Miami Publishing Company financial statements D Balance Sheets (in thousands of dollars) 2021 Cash 30 Accounts receivable 200 Inventory 400 Current assets 630 Gross fixed assets 1000 Accumulated depreciation 180 Net fixed assets 820 Totul assets 1450 2020 20 395 510 925 1000 220 780 1705 2019 30 430 640 1100 1650 280 1370 2470 Accounts payable Accruals Notes payable Current liabilities Long-term deht (bonds) Preferred stock Common stock Paid-in capital Retained earnings Total liab & equity 250 200 100 550 500 0 25 75 300 1450 300 260 150 710 500 0 25 75 395 1705 375 315 280 970 700 0 200 100 500 2470 40 Income Statements (in thousands of dollars) 2021 2020 Sales 4000 4800 Operating expenses 3640 4520 Depreciation expense 40 EBIT 320 240 Interest expense 40 50 EBT 280 190 Taxes (40%) 112 76 NI 168 114 2019 5800 5560 60 180 70 110 44 66