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Wingler Communications Corporation (WCC) produces premium stered that it for $20.00 per and this year's expected to be 440,000 units. Variable productions for the expected under present production methods are med at $10,300,000, and fored production (perating content are 84,599.000, what 6,800,000 of debt cutstanding at an interest rate of There are 349,000 pomon stock outstanding, and there is no preferred stock. The dividend payout ratios 70, and WOC is in the 259 federal-us-state tax bracket Wismall company with everage les of $25 milion less dring thebat years, sols empt to the interest decoction ration The company is comidering investing 67,200,000 in new upmuntSy would not create, but are ces persone would decine by 2011 Abo, Ford pertins coat wudref 51,560.000 t 31,800,000 Woc code raise the roured capital by borrowing 17,200,000 109. rytelling 240,000 shares of a 330 per her What would be we under the old production proces, der er new roceeded the processes comme stock Denet runt medical found your answers to the 2. $ 2.1 when we woud WC have the same wat ndertake the women and with or winter www-12.240.000.000,- Socket for Q.) Do not matten und your awwer to the web stevu would under the the producing tutdum, the ones the man who find out that you 10.000.000, and the foot or contender confondurance in wet where om Old W with det fandng New plan with mancing at there is altyd gedoen is EPS Sect Wingler Communications Corporation (WCC) produces premium stereo headphones that sell for $29.00 per set, and this year's sales are expected to be 440,000 units. Variable production costs for the expected sales under present production methods are estimated at 510,300,000, and feed production operating costs at present are $1,560,000. WC has 54,800,000 of debt outstanding at an interest rate of 9%. There are 240.000 shares of common stock outstanding, and there is no preferred too. The dividend payout ratio 70%, and WCC in the 255.federal-plus-state tax bracket WOC is a small company with average sales of $25 milion or less during the past 3 years, so it is exempt from the interest deduction Imitation The company is considering investing $7,200,000 in new equipment Sales would not increase, but variable costs per unit would decline by 20%. Also, foed operating costs would increase from $1,560,000 to $1,800,000 WCC could raise the required capital by borrowing $7,200,000 at 10% or by selling 240,000 additional shares of common stock at $30 per share. What would be westes ) under the old production process, (2) under the new process if it uses debt, and (3) under the new process it uses common stock? Do not round intermediate calculations. Round your nearest cent 2. 6. At what unit is level would have the same assuming it undertakes the investment and Frances with debt or with stock? (Hint: v-variable cost per unit - 58.240,000/440,000, and UPS - (PQ-VQ-F-1) . Se PSDebt . your units At what unit als bevel would be under the three production inancing setup that is under the old plan, the new plan with debt financing, and the new plan with stock Tinancine (ant: Note that void $10,000,000/440,000, and use the hints for part, setting the EPS equation equal to zero. Do not found intermediate calculations, Round your answers to the nearest whole number Old plan: units New plan with debt financing units New plan with stock financing units d. On the basis of the analysis in parts a throughs, and given that operating leverage is lower under the new setup, which plan is the riskiest, which has the highest expected EPS, and which would you recommend? Assume that there is a fairly high probability of sales failing as low as and EPSStock at the sales level to help assess the riskiness of the two financing plans. Negative values should be by the recent EPS Debt EPS Stocks Wingler Communications Corporation (WCC) produces premium stered that it for $20.00 per and this year's expected to be 440,000 units. Variable productions for the expected under present production methods are med at $10,300,000, and fored production (perating content are 84,599.000, what 6,800,000 of debt cutstanding at an interest rate of There are 349,000 pomon stock outstanding, and there is no preferred stock. The dividend payout ratios 70, and WOC is in the 259 federal-us-state tax bracket Wismall company with everage les of $25 milion less dring thebat years, sols empt to the interest decoction ration The company is comidering investing 67,200,000 in new upmuntSy would not create, but are ces persone would decine by 2011 Abo, Ford pertins coat wudref 51,560.000 t 31,800,000 Woc code raise the roured capital by borrowing 17,200,000 109. rytelling 240,000 shares of a 330 per her What would be we under the old production proces, der er new roceeded the processes comme stock Denet runt medical found your answers to the 2. $ 2.1 when we woud WC have the same wat ndertake the women and with or winter www-12.240.000.000,- Socket for Q.) Do not matten und your awwer to the web stevu would under the the producing tutdum, the ones the man who find out that you 10.000.000, and the foot or contender confondurance in wet where om Old W with det fandng New plan with mancing at there is altyd gedoen is EPS Sect Wingler Communications Corporation (WCC) produces premium stereo headphones that sell for $29.00 per set, and this year's sales are expected to be 440,000 units. Variable production costs for the expected sales under present production methods are estimated at 510,300,000, and feed production operating costs at present are $1,560,000. WC has 54,800,000 of debt outstanding at an interest rate of 9%. There are 240.000 shares of common stock outstanding, and there is no preferred too. The dividend payout ratio 70%, and WCC in the 255.federal-plus-state tax bracket WOC is a small company with average sales of $25 milion or less during the past 3 years, so it is exempt from the interest deduction Imitation The company is considering investing $7,200,000 in new equipment Sales would not increase, but variable costs per unit would decline by 20%. Also, foed operating costs would increase from $1,560,000 to $1,800,000 WCC could raise the required capital by borrowing $7,200,000 at 10% or by selling 240,000 additional shares of common stock at $30 per share. What would be westes ) under the old production process, (2) under the new process if it uses debt, and (3) under the new process it uses common stock? Do not round intermediate calculations. Round your nearest cent 2. 6. At what unit is level would have the same assuming it undertakes the investment and Frances with debt or with stock? (Hint: v-variable cost per unit - 58.240,000/440,000, and UPS - (PQ-VQ-F-1) . Se PSDebt . your units At what unit als bevel would be under the three production inancing setup that is under the old plan, the new plan with debt financing, and the new plan with stock Tinancine (ant: Note that void $10,000,000/440,000, and use the hints for part, setting the EPS equation equal to zero. Do not found intermediate calculations, Round your answers to the nearest whole number Old plan: units New plan with debt financing units New plan with stock financing units d. On the basis of the analysis in parts a throughs, and given that operating leverage is lower under the new setup, which plan is the riskiest, which has the highest expected EPS, and which would you recommend? Assume that there is a fairly high probability of sales failing as low as and EPSStock at the sales level to help assess the riskiness of the two financing plans. Negative values should be by the recent EPS Debt EPS Stocks

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