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kramer
3 years ago
5

Dirty Don's Bicycle Shop is current financed with 100% equity. The firm currently has 100,000 shares of common stock outstanding

, selling for $50 per share. Don is considering a capital restructuring project, where the firm would be financed with 45% debt and 55% equity. How many bonds would Don have to sell at par value? (Remember that par value of a bond is $1,000).
Business
1 answer:
Stella [2.4K]3 years ago
6 0

Answer:

Number of bonds to raise = 2250

Explanation:

given data

current financed = 100% equity

common stock outstanding = 100,000 shares

selling = $50 per share

debt = 45%

equity =55%

par value of a bond = $1,000

to find out

How many bonds would Don have to sell at par value

solution

we get here first the value of equity that is express as

value of equity = Number of shares × Price per share .................1

put here value

value of equity = 100,000 × $50

value of equity = $5,000,000

and

financed with bonds = 45 % of value of equity

financed with bonds = 45 % × $5,000,000

financed with bonds = $2,250,000

so

Number of bonds to raise is express as

Number of bonds to raise = \frac{2,250,000}{1000}

Number of bonds to raise = 2250

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Dmitriy789 [7]

Answer:

The question is incomplete, find complete question in the attached.

The receivables turnover for the current year is 9.02 times while average days sales in receivable is  41 days

Explanation:

The formula for computing receivables turnover ratio is given as:

Net credit sales/average accounts receivable,where average receivables is the opening plus closing receivables divided by two.

Net credit sales=$35,657

Average receivables =($3495+$4415)/2=$3955

Receivable turnover ratio=$35657/$3955

                                          =9.02

Average days sales in receivable=number of days in the year/receivable turnover ratio

Average days sales in receivable=365/9.02

                                                          =40.47 days approx 41 days

The average days sales in receivable implies the average number of days it takes receivables to settle their accounts

Download xlsx
7 0
3 years ago
Which of the following would cause demand-
gayaneshka [121]

Answer: c

Explanation:

6 0
3 years ago
Prior to liquidating their partnership, Joyce and Xi had capital accounts of $50,000 and $105,000, respectively. Prior to liquid
Iteru [2.4K]

Answer:

Joyce cash distribution   = $262500

Explanation:

given data

Joyce capital = $50,000

Xi capital = $105,000

liabilities = $10,000

assets sold = $190,000

to find out

we consider Determine the amount received by Joyce as a final distribution from liquidation of the partnership

solution

we carrying value of non-cash asset prior to liquidation is

value of non-cash asset prior to liquidation = $50,0000 + $105,000 + $10,000

value of non-cash asset prior to liquidation =  $615000

so Profit on Liquidation  is = value of non-cash asset prior to liquidation - Sale of Asset

Profit on Liquidation  is = $615000 - $190,000

Profit on Liquidation  is = $ 425000

and here since

Joyce and Xi share income and losses equally

so Joyce share of profit will be

Joyce share of profit  = 50% × $ 425000

Joyce share of profit  = $212500

and

so Joyce cash distribution  will be

Joyce cash distribution  = Joyce share of profit + Joyce capital

Joyce cash distribution   = $212500 + $50,000

Joyce cash distribution   = $262500

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3 years ago
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False thank me later guys :)
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2 years ago
Power and performance sports are dominant today because they do not foster the interests of people and organizations with the re
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I believe that statement is false

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