Sydney Rangers Inc operates remote parking lots near major airports. The board of directors of this family-owned company believes that Sydney Rangers could earn an additional $2 million income before interest and taxes by expanding into new markets. However, the $5 million that the business needs for growth cannot be raised within the family. The directors, who strongly wish to retain family control of the company, must consider issuing securities to outsiders.Sydney Rangers’s Plan 1 is to borrow at 6%. Plan 2 is to issue 100,000 common shares. Plan 3 is to issue 100,000 non-voting, $3.75 preferred shares ( $3.75 is the annual dividend paid on each preferred share).Sydney Rangers currently has net income of $3.5 million and 1 million common shares outstanding. The company’s income tax rate is 25%.Requirements:1. Prepare an analysis to determine which plan will result in the highest earning per common share.2. Recommend one plan to the board of directors. Explain your reasons.

Hi there, I don't know how to solve this finance question: The Harlow Corporation has promised to pay its debt holders an amount of $2,500 over the next year. The firm's shareholders hold claim to whatever is left after the debt holders' claims have been satisfied.  Calculate Harlow's debt and equity level if its assets total $1100 at the end of the year Find: Value of Debt =  Value of Equity =                             If asset levels is of $2,200, Value of Debt =          Value of Equity =                          If asset value is $6,000, Value of Debt =              Value of Equity =      thank you

McConn Manufacturing is currently all-equity financed, has an EBIT of $2 million, and has a corporate tax rate of 21 percent. Natalie, the company’s founder, is the lone shareholder. All earnings are paid out as dividends to Natalie. If the firm were to convert $4 million of equity into debt, the cost would be 10 percent and Natalie would hold all the debt. Assume Natalie pays personal taxes on interest income at a rate of 37 percent but pays taxes on dividends at a rate of 20 percent. Calculate the total cash flow to Natalie after she pays personal taxes if the firm is unlevered and if it is levered

An enterprise owner is considering three options to raise funds for his business activities, each with a different source of capital: • option I-business activities financed exclusively with equity of $600,000, • option II equity amounts to $450,000, the remaining $150,000 is borrowed from a bank at the annual rate of 7.6%, option III equity amounts to $350,000, the remaining $250,000 is borrowed from a bank at the annual rate of 10.4%. The annual net sales revenue is expected to reach $760,000 with total operating costs being $687,000. The enterprise pays 19% income tax. Based on the information provided, determine: return on equity depending on the adopted financing option and its increase (AROE) possible to obtain due to using the debt, ● the degree of financial leverage for each financing option, .threshold EBIT and the threshold return on equity needed for financial leverage to work.

Hanuman Corp is a medium-sized corporation that has long dominated their market. With a strong cash-flow position, they have decided to invest excess cash strategically. In particular, Hanuman made periodic investments with their main supplier, Shiva. Although Hanuman currently owns 18% of the common shares of Shiva, it does have significant influence over the operations of this investee company.  Hanuman Corp has a December 31st year end. Before 2020, Hanuman had invested $22.4 million in Shiva and, at December 31, 2019, the investment had a fair value of $21.3 million. Hanuman did not sell or purchase any Shiva shares this year.  Hanuman declared and paid a dividend totalling $2.2 million on all its common shares and reported 2020 net income of $13.6 million. Hanuman’s 18% ownership of Shiva has a December 31, 2020, fair value of $21,405,000.   Required:            Prepare the appropriate entries for the Shiva investment, for 2020

2. National Business Machine Co. (NBM) has $4.9 million of extra cash after taxes have been paid.  NBM has two choices to make use of this cash.  One alternative is to invest the cash in financial assets.  The resulting investment income will be paid out as a special dividend at the end of three years.  In this case, the firm can invest in either Treasury bills yielding 3% or 5% preferred stock.  IRS regulations allow the company to exclude from taxable income 70% of the dividends received from investing in another company's stock.  Another alternative is to pay out the cash now as dividends.  This would allow the shareholders to invest on their own in Treasury bills with the same yield or in preferred stock.  The corporate tax rate is 21%.  Assume the investor has a 31% personal income tax rate, which is applied to interest income and preferred stock dividends.  The personal dividend tax rate is 15% on common stock dividends.  Should the cash be paid today or in three years?  Which of…