Assume that you are an analyst attempting to compare the financial structures of

Assume that you are an analyst attempting to compare the financial structures of two companies. In particular, you must analyze the debt and equity categories of the two firms and calculate a debt-to-equity ratio for each firm. The Liability and Equity categories of First Company at year-end appeared as follows:
First Company’s loan payable bears interest at 8%, which is paid annually. The principal is due in five years. The Liability and Equity categories of Second Company at year-end appeared as follows:
Second Company’s preferred stock is 8%, cumulative. A provision of the stock agreement specifies that the stock must be redeemed at face value in five years.
It appears that the loan payable of First Company and the preferred stock of Second Company are very similar. What are the differences between the two securities?
When calculating the debt-to-equity ratio, do you believe that the Second Company preferred stock should be treated as debt or as stockholders’ equity? Write a statement expressing your position on the issue.
Part 2:
Rohnan Inc. needs to raise $500,000. It is considering two options:
Issue preferred stock, $100 par, 8%, cumulative, nonparticipating, callable at $110. The stock could be issued at par.
Issue common stock, $1 par, market $10. Currently, the company has 400,000 shares outstanding distributed equally in the hands of five owners. The company has never paid a dividend.
Rohnan has asked you to consider both options and make a recommendation. It is equally concerned with cash flow and company control. Write your recommendations.
Initial post due by Thursday.
Remember to include at least one scholarly source in your post or comments. Source must be cited in-text and full reference listed at the end of the post, both in APA format. Then, comment on at least two posts from your peers within the Discussion Thread. Due by Sunday.

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more