3.4. The following information is available about Dnieper Company. Number of shares = 100,000 EBIT = $200,000 Income tax rate = 30% Price per share= $4.20 Coupon rate on bonds = 8% _Long-term debt = $1 million Find its (A) P/E ratio, (B) Interest coverage ratio, and (C) Debt ratio O a. PE Ratio = 5, Interest Coverage Ratio = 0.4, Debt Ratio = 70.42% O b. PE Ratio = 5, Interest Coverage Ratio = 2.5, Debt Ratio = 70.42% O c. PE Ratio = 0.84, Interest Coverage Ratio = 2.5, Debt Ratio = 70.42% O d. PE Ratio = 4.2, Interest Coverage Ratio = 2.5, Debt Ratio = 70.42%

3.4. The following information is available about Dnieper Company. Number of shares = 100,000 EBIT = $200,000 Income tax rate = 30% Price per share= $4.20 Coupon rate on bonds = 8% _Long-term debt = $1 million Find its (A) P/E ratio, (B) Interest coverage ratio, and (C) Debt ratio O a. PE Ratio = 5, Interest Coverage Ratio = 0.4, Debt Ratio = 70.42% O b. PE Ratio = 5, Interest Coverage Ratio = 2.5, Debt Ratio = 70.42% O c. PE Ratio = 0.84, Interest Coverage Ratio = 2.5, Debt Ratio = 70.42% O d. PE Ratio = 4.2, Interest Coverage Ratio = 2.5, Debt Ratio = 70.42%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter13: Capital Structure Concepts

Section: Chapter Questions

Problem 2P

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