Sprint LTE 750 PM 40 eztomheducationcom Ch Assignment help

Sprint LTE 7:50 PM * 40% ezto.mheducation.com Ch Assignment help 4 0pint Comparaive financial statements for Weller Corporation, a merchandising company for the year ending December 31 appear below The company did not issue any new common stock during the year. A total of 500,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 10%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company\'s common stock at the end of the year was $23. All of the company\'s sales are on account Weller Corporation Comparative Balance Sheet (dollars in 0 12.1 2348 90300 9,100 Total paid-n er 964

Solution

Answer 1. Times Interest Earned Ratio = Earnings before interest expense & income Tax / Interest expense Times Interest Earned Ratio = $14,500 / $910 = 15.9 Times (Approx.) Answer 2. Debt to Equity Ratio = Total Liabilities / Shareholders\' Equity Debt to Equity Ratio = $29,360 / $47,668 Debt to Equity Ratio = 0.62 (Approx.) Answer 3. Equity Multiplier = Total Assets / Total Shareholders\' Equity Equity Multiplier = $77,028 / $47,668 Equity Multiplier = 1.62 (Approx.)