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  • Mar 17, 2010, 06:16 PM
    becca2uplayer2
    Capital Structure
    Bixton Company’s new chief financial officer is evaluating
    Bixton’s capital structure. She is concerned that the firm might be underleveraged, even
    though the firm has larger-than-average research and development and foreign tax credits
    when compared to other firms in its industry. Her staff prepared the industry comparison
    shown here.
    a. Bixton’s objective is to achieve a credit standing that falls, in the words of the chief
    financial officer, “comfortably within the ‘A’ range.” What target range would you recommend
    for each of the three credit measures?
    b. Before settling on these target ranges, what other factors should Bixton’s chief financial
    officer consider?
    c. Before deciding whether the target ranges are really appropriate for Bixton in its current
    financial situation, what key issues specific to Bixton must the chief financial officer
    resolve?

    FUNDS FROM
    RATING FIXED CHARGE OPERATIONS/ LONG-TERM DEBT/
    CATEGORY COVERAGE TOTAL DEBT CAPITALIZATION
    Aa 4.00–5.25x 60–80% 17–23%
    A 3.00–4.30 45–65 22–32
    Baa 1.95–3.40 35–55 30–41
  • Mar 19, 2010, 12:10 AM
    morgaine300

    Please start a thread for your question instead of tagging onto someone else's. I've moved yours to its own thread.

    Also, you apparently did not bother to read the post that was above yours that linked to our guidelines on posting homework:
    https://www.askmehelpdesk.com/financ...-b-u-font.html

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