EBIR, Taxes, and Leverage repeat parts (a) and (b) in Problem 1 assuming Wild Side has a

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EBIR, Taxes, and Leverage repeat parts (a) and (b) in Problem 1 assuming Wild Side has a tax rate of 35 percent.

a. Calculate earnings per share (EPS) under each of the three economic scenarios before any debt is issued. Also calculate the percentage changes in EPS when the economy expands or enters a recession.

b. Repeat part (a) assuming that Wild Side goes through with recapitalization. What do you observe?

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Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th Edition

Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan

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Question Posted: May 09, 2011 04:29 AM

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EBIR, Taxes, and Leverage repeat parts (a) and (b) in Problem 1 assuming Wild Side has a

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Fundamentals of Corporate Finance

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