Business, 30.03.2021 17:00 des12410

Consider a firm with an EBIT of $559,000. The firm finances its assets with $1,090,000 debt (costing 6.4 percent) and 209,000 shares of stock selling at $15.00 per share. The firm is considering increasing its debt by $900,000, using the proceeds to buy back 84,000 shares of stock. The firm is in the 35 percent tax bracket. The change in capital structure will have no effect on the operations of the firm. Thus, EBIT will remain at $559,000. Calculate the EPS before AND after the change in capital structure and indicate changes in EPS. (Round your answers to 4 decimal places.) EPS before $ EPS after $ Difference $

Answers: 2

Show answers

Another question on Business

Business, 21.06.2019 21:20

Kahn company's static budget was based on sales volume of 12,000 units. its flexible budget was based on sales volume of 14,000 units. based on this information multiple choice the sales volume variance is expected to be unfavorable. the materials cost volume variance is expected to be favorable. the labor cost volume variance is expected to be unfavorable. none of the answers is correct.

Answers: 3

Answer

Business, 21.06.2019 23:30

Which alternative accounting method allows farmers to record expenses and incomes in the year in which they sell their yield? gaap allows for the method, which permits farmers to subtract the expenses of producing the crop in the year in which they sell the yield and earn the revenue.

Answers: 3

Answer

Business, 22.06.2019 09:40

Alpha industries is considering a project with an initial cost of $8 million. the project will produce cash inflows of $1.49 million per year for 8 years. the project has the same risk as the firm. the firm has a pretax cost of debt of 5.61 percent and a cost of equity of 11.27 percent. the debt–equity ratio is .60 and the tax rate is 35 percent. what is the net present value of the project?

Answers: 1

Answer

Business, 22.06.2019 11:40

Manipulation manufacturing's (amm) standards anticipate that there will be 5 pounds of raw material used for every unit of finished goods produced. amm began the month of maymay with 8,000 pounds of raw material, purchased 25,500 pounds for $ 15,300 and ended the month with 7,400 pounds on hand. the company produced 4,9004,900 units of finished goods. the company estimates standard costs at $ 1.10 per pound. the materials price and efficiency variances for the month of maymay were:

Answers: 1

Answer

You know the right answer?

Consider a firm with an EBIT of $559,000. The firm finances its assets with $1,090,000 debt (costing...

Questions