Your company's summarized financial information for the beginning and projected end of the current year is as follows: Beginning of the Year End of the Year (projected) Assets $90,000 $100,000 Liabilities 30,000 30,000 Equity 60,000 70,000 Net Income 15,000 Your company is considering issuing 30 bonds at the end of the year (December 31st). The bonds will pay 6% interest semi-annually for 15 years and the market rate for similar bonds is 5%. Calculate the following ratios with and without the bond issue. Review question: how much did the company pay in dividends this year (if any)? The company did not issue or repurchase any stock during the year.
FIND:
ROE= If bonds are issued?
Debt ratios: With and without bond issue?
D/E: with and without bond issue?