Prepaying the bonds on the company debt-to-equity ratio, Accounting Basics

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Prepaying the bonds on the company debt-to-equity ratio

Tart Company's most recent balance sheet reports total assets of $42,000,000, total liabilities of $16,000,000 and stockholders' equity of $26,000,000. Management is considering using $3,000,000 of excess cash to prepay $3,000,000 of outstanding bonds. What effect, if any, would prepaying the bonds have on the company's debt-to-equity ratio?

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Accounting Basics: Prepaying the bonds on the company debt-to-equity ratio

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Accounting Basics: Prepaying the bonds on the company debt-to-equity ratio

Reference No:- TGS054099

Have a Question? (oR Write a Review)

Recent Questions Asked Accounting Basics

Q : Preparing the journal entry to record interest

Q : What is the net present value if cost of capital is given

Q : Inventory costs for the current order quantity

Q : Problem on amount in the flexible budget

Q : Prepaying the bonds on the company debt-to-equity ratio

Q : Sales price per unit-variable cost per unit

Q : Maximum amount of before-tax salary

Q : What amount of taxable income

Q : Recommend the reduction in sales price

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Request for Solution File

Ask an Expert for Answer!!

Accounting Basics: Prepaying the bonds on the company debt-to-equity ratio

Reference No:- TGS054099

Recent Questions Asked Accounting Basics

Q : Preparing the journal entry to record interest

Q : What is the net present value if cost of capital is given

Q : Inventory costs for the current order quantity

Q : Problem on amount in the flexible budget

Q : Prepaying the bonds on the company debt-to-equity ratio

Q : Sales price per unit-variable cost per unit

Q : Maximum amount of before-tax salary

Q : What amount of taxable income

Q : Recommend the reduction in sales price

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