Question
1. The company Meta has the following data: Sales 1,000 EBIT 100 Equity 100 Debt 0 The company Beta has the following data: Sales 1,000
1. The company Meta has the following data: Sales 1,000 EBIT 100 Equity 100 Debt 0 The company Beta has the following data: Sales 1,000 EBIT 100 Equity 100 Debt 0 But the company decides to increase leverage by paying a dividend of 50 at the beginning of the year. The interest rate is 5% Income tax rate is 25% Both companies had 500 shares at the beginning of the year, with a face value of 0.1 per share. At the end of the year, the market price for both companies is 750 Find Net Income ROE EPS P/E ratio For both companies and explain which one would be your choice if you were to invest in only one of them, explain in detail by using your calculations. The current answer on Chegg is incorrect
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