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The below company outlined and its creditors have agreed upon a reorganization plan. In this plan, each shaer of the $6 preferred stock will be...

I am doing a reorganization exercise for my MBA class and am lost.  I figured out the proposed BS I believe, but struggling with how to complete the proposed income statement.  See attached doc.  Thanks!!

The below company outlined and its creditors have agreed upon a reorganiza±on plan. In this plan, each shaer of the $6 preferred stock will be exchanged for one share of $2.40 preferred with a par value of $37.50 plus one 8% subordinated income debenture with a par value of $75. The $10.50 preferred issue will be re±red with cash. 2013 Balance Sheet, in millions Actual Projected Proj comments Current Assets 168 159 Less $9 for re±rement of the $10.50 PS Total Current assets $ 168 $ 159 Net Fixed assets 153 153 Goodwill 15 15 Total Assets $ 336 $ 327 CL 42 42 Adv Payments 78 78 Reserves 6 6 Subordinated debenture 90 $75 X 1.2M shares $6 Preferred Stock, $112.50 PV (1.2M shares) 135 45 New $2.40 preferred stock at $37.50 per share $10.50 Preferred Stock, no par, callable at $150 (60,000 shares) $ 9 Re±red with cash Common Stock, $1.50 par value (6,000,000 shares) 9 9 RE 57 57 Total Claims $ 336 $ 327 2013 Income Statement, in millions Actual Proposed Proj comments
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Net Sales $ 540 $ 540 Oper Expense $ 516 Net Oper Income $ 24 Other Income $ 3 EBT $ 27 Taxes 50% $ 13.5 NI $ 13.5 Dividends on $6 preferred $ 7.2 2.9 $2.40 div X 1.2M shares Dividends on $10.50 preferred $ 0.6 Income Avail to CS holders $ 5.7 ** Interest expense for debenture is $90 X .08 = $7.2
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Dear Student, Please find attached... View the full answer

9624209.xls

Solution-a
Balance Sheet
Current Assets
Net Fixed Assets
Goodwill $159
$153
$15 Total Assets $327 Current Liabilities
Advanced payments
Reserves
Subordinated debenture
Preferred stock ($2.40),...

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