, 02.12.2019 23:10 Twitches

# Gabe's market is comparing two different capital structures. plan i would result in 11,000 shares of stock and \$225,000 in debt. plan ii would result in 14,000 shares of stock and \$150,000 in debt. the interest rate on the debt is 8 percent. ignoring taxes, compare both of these plans to an all-equity plan assuming that ebit will be \$45,000. the all-equity plan would result in 20,000 shares of stock outstanding. of the three plans, the firm will have the highest eps with and the lowest eps with 1) plan i; plan ii 2) plan i; all-equity plan 3) plan ii; plan i 4) plan ii; all-equity plan 5) all-equity plan; plan i

Data pertaining to the current position of forte company are as follows: cash \$437,500 marketable securities 170,000 accounts and notes receivable (net) 320,000 inventories 700,000 prepaid expenses 42,000 accounts payable 240,000 notes payable (short-term) 250,000 accrued expenses 310,000 required: 1. compute (a) the working capital, (b) the current ratio, and (c) the quick ratio. round ratios to one decimal place. 2. compute the working capital, the current ratio, and the quick ratio after each of the following transactions, and record the results in the appropriate columns of the table provided. consider each transaction separately and assume that only that transaction affects the data given. round to one decimal place. a. sold marketable securities at no gain or loss, 75,000. b. paid accounts payable, 135,000. c. purchased goods on account, 100,000. d. paid notes payable, 105,000. e. declared a cash dividend, 125,000. f. declared a common stock dividend on common stock, 45,000. g. borrowed cash from bank on a long-term note, 205,000. h. received cash on account, 130,000. i. issued additional shares of stock for cash, 635,000. j. paid cash for prepaid expenses, 15,000.