Question

how to calculate the dollar amount of debt if the company want to achieve credit rating...

how to calculate the dollar amount of debt if the company want to achieve credit rating of A using

ebit interest coverage(6.9x), interest rate(7.31%) and estimated ebit projections(382.5)

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Problem 6-10 Making credit-rating changes (LO6-7) Exhibit 6.5 describes the key financial ratios Standard & Poor’s...
Problem 6-10 Making credit-rating changes (LO6-7) Exhibit 6.5 describes the key financial ratios Standard & Poor’s analysts use to assess credit risk and assign credit ratings to industrial companies. Those same financial ratios for a single company over time follow. The company was assigned a AAA credit rating at the beginning of 2013. 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 EBIT interest coverage 23.8 22.1 21.6 20.8 20.6 12.4 EBITDA interest coverage 25.3 26.4 25.6 23.2 22.9 16.5 FFO/Total...
Suppose one company that has credit-rating CCC issued bond. Should you buy this bond and why?...
Suppose one company that has credit-rating CCC issued bond. Should you buy this bond and why? How this credit rating influence interest rate?
Fearing that market interest rate will fluctuate, Bethlehem with credit rating of Baa decides to engage...
Fearing that market interest rate will fluctuate, Bethlehem with credit rating of Baa decides to engage in an interest rate swaps for their 100 million variable debt with US steel in January 1, 2017. US steel, with credit rating of Aaa, has long term fixed debt of $100 million at the time of transaction. According to the swaps contract, Bethlehem will pay 8 percent interest rate to US steel and, in turn US steel pays T-bill minus 0.25% to Bethlehem...
Calculating Ratios and Estimating Credit Rating The following data are from Under Armour's 2015 10-K report...
Calculating Ratios and Estimating Credit Rating The following data are from Under Armour's 2015 10-K report ($ thousands). Revenue $3,814,758 Earnings from continuing operations $224,796 Interest expense 14,184 Capital expenditures (CAPEX) 298,928 Tax expense 154,112 Total debt 669,000 Amortization expense 13,840 Average assets 2,481,992 Depreciation expense 101,600 a. Use the data above to calculate the following ratios: EBITA/Average assets, EBITA Margin, EBITA/Interest expenses, Debt/EBITDA, CAPEX/Depreciation Expense. b. Using the ratios you calculate in part a., estimate the credit rating that...
How would you describe the relationship between a bond's credit rating and its interest rate? Multiple...
How would you describe the relationship between a bond's credit rating and its interest rate? Multiple Choice Inverse relationship Unrelated Logarithmic Direct relationship
you have a credit card debt of $5,000. How much should you pay each month to...
you have a credit card debt of $5,000. How much should you pay each month to pay off if your credit card carries an interest rate of 20.05% and you want to pay off the debt with equal monthly payments in two years and six months? A. $129.73 B. $210.56 C. $213.27 D. None of above
Your company has $3,300,000 in credit sales during 2011. The beginning balance of the allowance for...
Your company has $3,300,000 in credit sales during 2011. The beginning balance of the allowance for doubtful accounts is $4,700 and the company writes off $1,000 in bad debts during the year. (a) Calculate the estimated doubtful accounts using the aging of accounts receivable method given that $1,680,000 of the credit sales are not yet due (estimated that 0.6% are uncollectible), $350,000 are 1-60 days late (estimated that 1.40% are uncollectible) and $20,000 are over 60 days late (estimated that...
If a company add debt to is financials to repurchase shares how it affect the company...
If a company add debt to is financials to repurchase shares how it affect the company price per share? I know we should add (debt*tax rate/ shares outstanding) to the initial price but what is the thinking/rationale for using that formula? In other words, if tax shield is interest rate*debt*tax rate why to calculate the new price per share when issuing 15% debt we add back only (debt*tax rate/ shares outstanding)?
Assume no taxes, no bankruptcy costs. Company U has no debt outstanding. The market value is...
Assume no taxes, no bankruptcy costs. Company U has no debt outstanding. The market value is € 410623, earnings before interest and taxes (EBIT) is € 55192 and the share price is € 42. Company U is considering a € 228388 debt issue with a 6% interest rate (the proceeds are used to buy back the shares). Calculate Earnings per share (EPS). How many shares will be bought back? Calculate earnings per share (EPS) after the debt issue.
How do credit (debt) ratings affect the cost of borrowing for a company?
How do credit (debt) ratings affect the cost of borrowing for a company?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT