I need to find the net income and the return on investments for the following: A

Question

I need to find the net income and the return on investments for the following:
A corporation plans to invest $1 million in oil exploration. The corporation is considering two plans to raise the money. Under Plan #1, bonds with a contract rate of interest of 6% would be issued. Under Plan #2, additional shares of common stock would be issued at $20 per share. The corporation currently has 300,000 shares of stock outstanding, and it expects to earn $700,000 per year before bond interest and income taxes.

Explanation / Answer

plan 1 bond with interest rate 6% for $1 million interest =.06 milion =$60000 net incoome before interest and taxes = $700,000 plan 2 300000 at $20 per share = 300000*20 =$ 6000000

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---