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Business, 10.08.2021 01:20 brittd2728

Southern Wind is an all-equity firm with 19,700 shares of stock outstanding and a total market value of $359,000. Based on its current capital structure, the firm is expected to have earnings before interest and taxes of $29,500 if the economy is normal, $16,800 if the economy is in a recession, and $42,200 if the economy booms. Ignore taxes. Management is considering issuing $90,100 of debt with an interest rate of 9 percent. If the firm issues the debt, the proceeds will be used to repurchase stock. What will the earnings per share be if the debt is issued and the economy booms

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