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Business, 30.03.2020 20:40 itzygutierrez7373

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?

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