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  • American Home Products

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    Shivani Bhatia
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    The document contains financial metrics for different debt levels from no debt to 70% debt. As debt increases, EPS, interest, and dividend decrease while stock price, P/E ratio, and total capitalization ratio increase. Based on the parameters shown, taking on 30% debt provides the best financial position with acceptable ratios.

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    The document contains financial metrics for different debt levels from no debt to 70% debt. As debt increases, EPS, interest, and dividend decrease while stock price, P/E ratio, and total capitalization ratio increase. Based on the parameters shown, taking on 30% debt provides the best financial position with acceptable ratios.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    425 views2 pages

    American Home Products

    Uploaded by

    Shivani Bhatia
    The document contains financial metrics for different debt levels from no debt to 70% debt. As debt increases, EPS, interest, and dividend decrease while stock price, P/E ratio, and total capitalization ratio increase. Based on the parameters shown, taking on 30% debt provides the best financial position with acceptable ratios.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    Ratios

    No Debt
    30%
    50%
    70%
    FL
    1.003225 1.061549 1.106245 1.154871
    ICR
    415.1304 17.49905 10.50342 7.503662
    ROE
    20.46731 22.65291 24.14768 25.85366
    EPS
    3.18
    3.33
    3.41
    3.49
    Interest
    2.3
    52.7
    87.8
    122.9
    Div
    295.3
    271
    260.1
    249.1
    TCR
    297.6
    323.7
    347.9
    372
    Cash Eq
    593.3
    360.3
    360.3
    360.3
    P/E
    9.433962 9.433962 9.433962 9.433962
    Price
    30 31.41509 32.16981 32.92453
    D/E
    0.009443 0.428555 0.99984 2.333422
    Bond Rating AAA+
    AAA+
    AAA
    AA*

    Based on above parametrs it is best to go for debt at 30%

    AHP
    EPS
    2.84
    Div
    1.7
    Stock Price
    30
    P/E
    10.6
    PAT/Sales
    11.70%
    ROE
    30.30%
    ICR
    436.6
    D/E
    0.90%
    Bond Rating AAA

    Warner Lambert
    2.41
    1.32
    20
    8.3
    5.50%
    13.00%
    5
    32.40%
    AAA/AA*

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