FIN 486 Expect Success/uophelp.com FIN 486 Expect Success/uophelp.com | Page 36

new common stock, netting $16 per share after underpricing and
flotation costs.

TO DO:
a. Over the relevant ranges noted in the following table, calculate
the after-tax cost of each source of financing needed to complete the
table.
Source of capital
Range of new financing
After-tax
cost (%)
Long-term debt
$0–$700,000
_________
$700,000 and above
_________
Preferred stock
$0 and above
_________
Common stock equity
$0–$1,300,000
_________
$1,300,000 and above
_________
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FIN 486 Week 5 Individual Assignment Eboy Corporation

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The current balance in accounts receivable for Eboy Corporation is
$443,000. This level was achieved with annual (365 days) credit sales
of $3,544,000. The firm offers its customers credit terms of net 30.
However, in an effort to help its cash flow position and to follow the
actions of its rivals, the firm is considering changing its credit terms
from net 30 to 2/10 net 30. The objective is to speed up the receivable