In the previous problem, compute the stock price for Cain Auto Supplies if it sells at 12

Question:

In the previous problem, compute the stock price for Cain Auto Supplies if it sells at 12 times EPS and EBIT is $40,000.


Previous problem

Cain Auto Supplies and Able Auto Parts are competitors in the aftermarket for auto supplies. The separate capital structures for Cain and Able are presented below.

Cain Able $ 50,000 Debt @ 10% 100,000 Common stock, $10 par $150,000 Debt @ 10% $100,000 Common stock, $10 par 50,000 Total Total $150,000 Common shares 10,000 Common shares 5,000
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Foundations of Financial Management

ISBN: 978-1259024979

10th Canadian edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta

Question Posted: