The Following Is a Summarized Balance Sheet of Falcon Corporation

question 53

Essay

The following is a summarized balance sheet of Falcon Corporation at December 31, 2013. All amounts are in $000's. Falcon requires additional financing of $5,000,000 to finance an expansion of its business. The two choices are:
Alternative 1: Issue a 20-year, $5,000,000 5% bond payable at face value.
Alternative 2: Issue 250,000 common shares at $20 each.
In Falcon's industry, a safe debt to total assets ratio is considered to be between 50% and 60%. Falcon's board of directors is risk adverse. Assume that the financing is made at the beginning of the year.
Instructions
a. Calculate the debt to total assets ratio under the two proposed financing methods.
b. Make a recommendation to Falcon on the better financing alternative and explain your choice.

Grasp the definition, structure, and examples of data structures.

Comprehend the properties and operations of one-dimensional arrays including their terminology and access techniques.

Differentiate between atomic data types and complex data structures.

Recognize the syntax and semantics of array declaration, initialization, and usage in programming.

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Definitions:

Supply

The sum of a good or service that is offered for sale at a particular price point within a specific market.

Consumers' Incomes

The total amount of money received by individuals or households, influencing their purchasing power and consumption patterns.

Computer Chips

Small electronic components made of semiconductor material, used to perform computing tasks and store data in various electronic devices.

Supply Curve

A graph showing the relationship between the price of a good and the quantity supplied, typically illustrating that as the price increases, the quantity supplied increases.