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Business, 27.06.2019 01:50 o10376643

Dickinson company has $12,160,000 million in assets. currently half of these assets are financed with long-term debt at 10.8 percent and half with common stock having a par value of $8. ms. smith, vice president of finance, wishes to analyze two refinancing plans, one with more debt (d) and one with more equity (e). the company earns a return on assets before interest and taxes of 10.8 percent. the tax rate is 35 percent. tax loss carryover provisions apply, so negative tax amounts are permissable. under plan d, a $3,040,000 million long-term bond would be sold at an interest rate of 12.8 percent and 380,000 shares of stock would be purchased in the market at $8 per share and retired. under plan e, 380,000 shares of stock would be sold at $8 per share and the $3,040,000 in proceeds would be used to reduce long-term debt. a. how would each of these plans affect earnings per share? consider the current plan and the two new plans

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