Question: ABC Inc must decide how to finance a $60 million investment in 2016. For 2016, calculate its times-burden-covered ratio if the firm chooses to raise the fund need by selling 2 million new shares at $30 a share. ABC Inc. Dec 2015 selected Information (in million $)
Expected EBIT (2016) $2,000
Sinking-fund payments due next year on existing debt $40
Interest due next year on existing debt $20
Company tax rate 30%
Common stock price per share $30
Common share outstanding 20 million 12.03