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Business, 07.07.2019 13:50 catchi7484

Money, inc., has no debt outstanding and a total market value of $250,000. earnings before interest and taxes, ebit, are projected to be $42,000 if economic conditions are normal. if there is strong expansion in the economy, then ebit will be 18 percent higher. if there is a recession, then ebit will be 30 percent lower. money is considering a $100,000 debt issue with an interest rate of 8 percent. the proceeds will be used to repurchase shares of stock. there are currently 10,000 shares outstanding. money has a tax rate 35 percent. a-1. calculate earnings per share (eps) under each of the three economic scenarios before any debt is issued.

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Money, inc., has no debt outstanding and a total market value of $250,000. earnings before interest...
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