Question
1. Following the instructions in the discussion for this case, enter the following data for each level of debt, including 0%, 20%, 40% and 60%
1. Following the instructions in the discussion for this case, enter the following data for each level of debt, including 0%, 20%, 40% and 60% leverage.
Debt-to-Capital Ratio | 0% | 20% | 40% | 60% |
Earnings per share | 2.88 | |||
Dividends per share | .85 | |||
Book value per share | 780.1 | |||
Return on assets | 10% | |||
Return on equity | 12.5% | |||
Interest coverage | 0 | |||
Stock price at P/E ratio of 14.47 | 41.67 | |||
Break-even P/E ratio for stock price of $41.67 | 14.47 | |||
Dividend yield at stock price of $41.67 | 2.04 | |||
Price at dividend yield of 2.04% | 41.67 | |||
Present value of debt tax shield | 0 | |||
Earnings available to security holders | 97.60 | |||
Change from actual | 0 | |||
Cash payments to security holders | 28.80 | |||
Change from actual | 0 | |||
Income taxes, change from actual | 53.7, 0 | |||
Impact on net income from a 10% reduction in EBIT | -9.76 | |||
Impact on net income from a 20% reduction in EBIT | -19.52 | |||
Internal growth rate at 30% payout ratio | 7.527% |
If there is missing information could you please still post the equation to find the answer
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