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  • For The Year Ended June 30 2009 A e G Enterprises Presented

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    M Bilal Saleem
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    For the year ended June 30, 2009, A.E.G. Enterprises presented their financial statements. The company formalized an expansion plan to increase fixed assets by $190 million and inventory by $10 million. The company's investment bankers suggested three financing plans: Plan A involves selling preferred stock at par for 5%; Plan B involves selling common stock at $10 per share; Plan C involves selling long-term bonds at par for 8% interest over 20 years.

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    For the Year Ended June 30 2009 a e g Enterprises Presented

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    For the year ended June 30, 2009, A.E.G. Enterprises presented their financial statements. The company formalized an expansion plan to increase fixed assets by $190 million and inventory by $10 million. The company's investment bankers suggested three financing plans: Plan A involves selling preferred stock at par for 5%; Plan B involves selling common stock at $10 per share; Plan C involves selling long-term bonds at par for 8% interest over 20 years.

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    26 views1 page

    For The Year Ended June 30 2009 A e G Enterprises Presented

    Uploaded by

    M Bilal Saleem
    For the year ended June 30, 2009, A.E.G. Enterprises presented their financial statements. The company formalized an expansion plan to increase fixed assets by $190 million and inventory by $10 million. The company's investment bankers suggested three financing plans: Plan A involves selling preferred stock at par for 5%; Plan B involves selling common stock at $10 per share; Plan C involves selling long-term bonds at par for 8% interest over 20 years.

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    of 1

    For the year ended June 30 2009 A E G Enterprises

    presented
    For the year ended June 30, 2009, A.E.G. Enterprises presented the financial statements
    shown below. Early in the new fiscal year, the officers of the firm formalized a substantial
    expansion plan. The plan will increase fixed assets by $190 million. In addition, extra inventory
    will be needed to support expanded production. The increase in inventory is purported to be $10
    million. The firm’s investment bankers have suggested the following three alternative financing
    plans:Plan A: Sell preferred stock at par, 5%.Plan B: Sell common stock at $10 per share.Plan
    C: Sell long-term bonds, due in 20 years, at par ($1,000), with a stated interest rate of
    8%.Requireda. For the year ended June 30, 2009, compute:1. Times interest earned2. Debt
    ratio3. Debt/equity ratio4. Debt to tangible net worth ratiob. Assuming the same financial results
    and statement balances, except for the increased assets and financing, compute the same
    ratios as in (a) under each financing alternative. Do not attempt to adjust retained earnings for
    the next year’s profits.c. Changes in earnings and number of shares will give the following
    earnings per share: Plan A—0.73, Plan B—0.69, and Plan C—0.73. Based on the information
    given, discuss the advantages and disadvantages of each alternative.d. Why does the 5%
    preferred stock cost the company more than the 8%bonds?
    View Solution:
    For the year ended June 30 2009 A E G Enterprises presented
    SOLUTION-- http://expertanswer.online/downloads/for-the-year-ended-june-30-2009-a-e-g-
    enterprises-presented/

    See Answer here expertanswer.online


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