Calculate times-burden-covered ratio

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Reference no: EM131931404

Question: ABC Inc must decide how to finance a $60 million investment in 2016. For 2016, calculate its times-burden-covered ratio if the firm chooses to raise the fund need by selling 2 million new shares at $30 a share. ABC Inc. Dec 2015 selected Information (in million $)

Expected EBIT (2016) $2,000

Sinking-fund payments due next year on existing debt $40

Interest due next year on existing debt $20

Company tax rate 30%

Common stock price per share $30

Common share outstanding 20 million 12.03

Reference no: EM131931404

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