Business, 29.11.2019 02:31 cruzsuarezjanca

Consider two companies in a world with no taxes that are alike except in borrowing choices. company 1 has no debt financing, and company 2 uses debt financing. the ebit for both companies is $1,000. company 1 has 500 shares outstanding and pays no interest. company 2 has 300 shares outstanding and pays $250 in interest. what is the eps for each company? a. both companies have an eps of $2.00. b. both companies have an eps of $2.67. c. company 1 has an eps of $2.00 and company 2 has an eps of $2.50. d. company 1 has an eps of $2.00 and company 2 has an eps of $2.27.

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Consider two companies in a world with no taxes that are alike except in borrowing choices. company...

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