As the Financial vice president for Bear Enterprises, you have the following information:
Expected net income after tax next year before new financing : $60,000,000
Sinking Fund payments due next year on existing debt: $20,000,000
Interest due next year on existing debt $18,000,000
Conpany Tax rate 25%
Common Stock Price, per share $17
Common Shares outstanding: 22,000,000
For next year assume the firm raises $60 Million of new debt at an interest rate of 9 percent.
Calculate Bear's EBIT
Calculate Bear's Interest Rate
Calculate Bear's times-interest earned ratio for next year assuming the firm raises $60 Million of new debt at an interest rate of 9 percent.
Calculate Bear's Earnings Per Share for next year assuming the firm raises $60 Million of new debt at an interest rate of 9 percent.