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Problem 19-6 - 150000 80 49 53 Alternative 3 80000 150000...

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 BALANCE SHEET        AMBER L. WOLRIDGE  A. Alternative 1 Total Current Liabilities  $150,000.00  Long-Term Debt  $-    Common Stock, par $1  $162,500.00  Paid-in Capital  $437,500.00  Retained Earnings  $50,000.00  Total Assets  $800,000.00  Alternative 2 Total Current Liabilities  $150,000.00  Long-Term Debt  $-    Common Stock, par $1  $150,000.00  Paid-in Capital  $450,000.00  Retained Earnings  $50,000.00  Total Assets  $800,000.00  Alternative 3 Total Current Liabilities  $150,000.00  Long-Term Debt  $500,000.00  Common Stock, par $1  $150,000.00  Paid-in Capital  $450,000.00  Retained Earnings  $50,000.00  Total Assets  $1,300,000.00  B. Mr. Holland's Control Current Plan  Alternative 1  Alternative 2 # Shares 80000 80000 80000 Total Shares 100000 162500
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Unformatted text preview: 150000 % 80% 49% 53% Alternative 3 80000 150000 53% C. Current Alternative 1 Total Assets 550000 8000000 EBIT 110000 160000 INTEREST 20000 EBT 90000 160000 40% TAX 36000 64000 NET INCOME 54000 96000 # SHARES 100000 162500 EARNINGS PER SHARE 0.54 0.59 D. Total Liabilities 400000 1500000 Debit Ratio 73% 19% E. I would recommend Alternative 3 due to being less risky. My recommendation is based o Alternative 2 Alternative 3 800000 1300000 160000 260000 40000 160000 220000 64000 88000 96000 132000 150000 150000 0.64 0.88 150000 650000 19% 50% on the invested yield 20% before taxes and interest, earnings per share of $0.88 in conjuntion with the d debt ratio decrease to 50%....
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