:16 PM edugen.wileyplus.com Top 10 Diversity Issues at Work Chron.com + Business
ID: 2486631 • Letter: #
Question
:16 PM edugen.wileyplus.com Top 10 Diversity Issues at Work Chron.com + Business I Chron.com wileyPLUS Exercise 11-15 Randolph Company has $1,172,800 in assets and $1,172,800 in stockholders' equity, with 38,700 shares outstanding the entire year. It has a return on assets ratio of 12%. In the past year, it had net income of $140,736. On anuary 1, 2012, it issued $363,600 in debt at 5% and immediately repurchased 19,350 shares for $363,600. Management expected that had it not issued the debt, it would have again had net income of $140,736. (a) Your answer is correct. Determine the company's net income and earnings per share for 2011 and 2012. (Ignore taxes in your computations.) (Round earnings per share to 2 decimal places, e.g. $2.66.) Net income Earnings per share Show Work is REQUIRED for this question: 140736 122556 3.636 6.33 Open Show Work SHOW SOLUTION Show ANSWE LINK TO TEXT Attempts: 1 of 5 used (b)Explanation / Answer
(a)
2011
2012
Pre-debt net income
$1,40,736.00
$1,40,736.00
Interest expense ($363,600 * 5%)
-
$18,180.00
Net income
$1,40,736.00
$1,22,556.00
No. of shares outstanding
38700
19350
Earnings per share
$3.64
$6.33
(c)
Debt to assets ratio = Total liabilities/Total assets
Debt to assets ratio for 2011 = $0 / $1,172,800 = 0%
Debt to assets ratio for 2012 = $363,600/$1,172,800 = 31%
2011
2012
Pre-debt net income
$1,40,736.00
$1,40,736.00
Interest expense ($363,600 * 5%)
-
$18,180.00
Net income
$1,40,736.00
$1,22,556.00
No. of shares outstanding
38700
19350
Earnings per share
$3.64
$6.33
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.