A
B
C
D
E
Net Income
$ 1,023,667 $ 823,667 $ 2,500,007 $ 1,778,978 $ 878,889
Total Debt
$ 30,000,000 $10,000,000 $ 9,000,000 $35,000,000 $30,000,000
Shareholders Equity $ 10,476,809 $ 7,302,111 $ 30,555,876 $11,586,809 $13,478,809
Total Capital
$ 40,476,809 $17,302,111 $ 39,555,876 $46,586,809 $43,478,809
Debt Rate
Tax Rate
13.10%
21%
14.40%
21%
14.60%
21%
13.70%
21%
8.50%
21%
You are an analyst at an local investment banking firm. You are looking at 5 companies in the beverag e sector that are your clients. Which company can use
leverage (i.e. increase debt - we are not concerned with financial flexibility or bankruptcy as these are rock solid companies) to increase it's return to shareholders.
Since investment banks generate revenues by being managers on a debt issuance, your boss Mr. Lollipop Lips PHD. would be so happy if there is a company that
may be interested in issuing debt.
O Company A
Company B
O Company C
Company D
O Company E
