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need help on a-2 and a-b it would be great if you could include how you found the answer :)

Clayton Industries has the following account balances: Current assets Noncurrent assets $ 21,000 87,000 Current liabilities Noncurrent liabilities Stockholders' equity $ 8,000 57,000 43,000 The company wishes to raise $41,000 in cash and is considering two financing options: Clayton can sell $41,000 of bonds payable, or it can issue additional common stock for $41.000. To help in the decision process, Clayton's management wants to determine the effects of each alternative on its current ratio and debt-to-assets ratio. Required a-1. Compute the current ratio for Clayton's management. (Round your answers to 2 decimal places.) Current Ratio 263 to 1 Currently If bonds are issued If stock is issued 7.75 to 1 7.75 to 1 a-2. Compute the debt-to-assets ratio for Clayton's management (Round your answers to 1 decimal place.) Debt to Assets Ratio 0.0 % Currently If bonds are issued If stock is issued b. Assume that after the funds are invested. EBIT amounts to $19,700. Also assume the company pays $3100 in dividends or $3,100 in interest depending on which source of financing is used. Based on a 30 percent tax rate, determine the amount of the increase in retained earnings that would result under each financing option. Additional Retained Earnings Bonds Stock

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