161. Jones Co., is considering the following alternative plans for financing their company:
Plan I
Plan II
Issue 10% Bonds (at face)
–
$2,000,000
Issue $10 Common Stock
$3,000,000
$1,000,000
Income tax is estimated at 40% of income.Determine the earnings per share of common stock under the two alternative financing plans, assuming income before bond interest and income tax is $1,000,000.
162. Jake Co., is considering the following alternative plans for financing their company:
Plan I
Plan II
Issue 10% Bonds (at face)
–
$3,000,000
Issue $10 Common Stock
$4,000,000
$1,000,000
Income tax is estimated at 40% of income.Determine the earnings per share of common stock under the two alternative financing plans, assuming income before bond interest and income tax is $1,000,000.
163. Using the following table, what is the present value of $5,000 to be received 5 years, if the market rate is 7% compounded annually?
Periods
5%
6%
7%
10%
12%
1
.95238
.94340
.93458
.90909
2
.90703
.89000
.87344
.82645
3
.86384
.83692
.81630
.75132
4
.82270
.79209
.76290
.68301
5
.78353
.74726
.71299
.62092
6
.74622
.70496
.66634
.56447
7
.71068
.66506
.62275
.51316
8
.67684
.62741
.58201
.46651
9
.64461
.59190
.54393
.42410
10
.61391
.55840
.50835
.38554
164. Using the following table, what is the present value of $5,000 to be received 5 years, if the market rate is 10% compounded annually?
Periods
5%
6%
7%
10%
12%
1
.95238
.94340
.93458
.90909
2
.90703
.89000
.87344
.82645
3
.86384
.83692
.81630
.75132
4
.82270
.79209
.76290
.68301
5
.78353
.74726
.71299
.62092
6
.74622
.70496
.66634
.56447
7
.71068
.66506
.62275
.51316
8
.67684
.62741
.58201
.46651
9
.64461
.59190
.54393
.42410
10
.61391
.55840
.50835
.38554
165. Use the following tables to calculate the present value of a $20,000 7%, 5 year bond that pays $1,400 ($20,000 ´ 7%) interest annually, if the market rate of interest is 7%Present Value of $1 at Compound Interest
Periods
5%
6%
7%
10%
12%
1
.95238
.94340
.93458
.90909
2
.90703
.89000
.87344
.82645
3
.86384
.83692
.81630
.75132
4
.82270
.79209
.76290
.68301
5
.78353
.74726
.71299
.62092
6
.74622
.70496
.66634
.56447
7
.71068
.66506
.62275
.51316
8
.67684
.62741
.58201
.46651
9
.64461
.59190
.54393
.42410
10
.61391
.55840
.50835
.38554
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more