HOW TO USE THIS GUIDE TO RATIO CALCULATION

Because the internal rate of return for the refunding decision (25.74%) exceeds the firm's required rate of return (5%) after taxes), the issue should be refunded. 16-4 Increase in common stock $100,000. Increase in preferred stock ($100,000 x 0.5) 50,000. Net worth $150,000. Increase in subordinated debt ($150,000 x 0.6) 90,000 ................
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