A company needs a capital of $200,000. It has 9,000 shares outstanding and has the following information: Price/ Unit $5 Variable cost/Unit $2 Fixed costs $50,000 Price/Share $30 Tax rate 40% The expected units sold based on probability of economic situation: Economy Probability Units Sold Good 0.2 140,000 Normal 0.5 80,000 Bad 0.3 10,000 The company can either stay without debt or have a debt ratio (D/A) of 60% with a 12% interest rate. 11. If the company decides to have a 60% debt ratio, its ROE in a normal economic situation is O a. 1.317% O b. 52.416 c. 3.270 d. $1317 e. None of the above 12. If the company decides to be 60% leveraged, its EPS in a bad economic situation would be * a. -2.29% b. -$20,640 O C. -$1.33 O d. -$2.29 e. None of the above 13. If the company was unleveraged, its EPS in a good economic situation would be a. $12.67 b. 12.67% C. 24.67% d. 14.2% e. None of the above 1909 OLVWXlctpedtufes g/formResponse 14. If the company has no debt, its expected ROE would be a 0.31 1.0.49 d. 0.049 O e None of the above 15. If the company has a box debt ratio, its expected ROE would be O a ALON Obilas O.. O 10000 e None of the above 9/formResponse 16. If the company carries no debt, its Expected EPS is O a. 10.87% O b.9.9% O c. $9.9 d. $10.87 e. None of the above 17. If the company has a 60% debt ratio, its Expected EPS is * a. 10.87% b. $9.9 O c. $10.87 O d. 9.9% e. None of the above 18. If D/A ratio is 60%, the standard deviation of the company's ROE would be * a. 1.033 b. 0.413 C. 0.565 d. 0.489 O e. 10.4 19. If D/A ratio is 0%, the standard deviation of the company's EPS is * O a. 9.184 b. 10.654 C.7.245 d. 10.87 e. None of the above A company needs a capital of $200,000. It has 9,000 shares outstanding and has the following information: Price/ Unit $5 Variable cost/Unit $2 Fixed costs $50,000 Price/Share $30 Tax rate 40% The expected units sold based on probability of economic situation: Economy Probability Units Sold Good 0.2 140,000 Normal 0.5 80,000 Bad 0.3 10,000 The company can either stay without debt or have a debt ratio (D/A) of 60% with a 12% interest rate. 11. If the company decides to have a 60% debt ratio, its ROE in a normal economic situation is O a. 1.317% O b. 52.416 c. 3.270 d. $1317 e. None of the above 12. If the company decides to be 60% leveraged, its EPS in a bad economic situation would be * a. -2.29% b. -$20,640 O C. -$1.33 O d. -$2.29 e. None of the above 13. If the company was unleveraged, its EPS in a good economic situation would be a. $12.67 b. 12.67% C. 24.67% d. 14.2% e. None of the above 1909 OLVWXlctpedtufes g/formResponse 14. If the company has no debt, its expected ROE would be a 0.31 1.0.49 d. 0.049 O e None of the above 15. If the company has a box debt ratio, its expected ROE would be O a ALON Obilas O.. O 10000 e None of the above 9/formResponse 16. If the company carries no debt, its Expected EPS is O a. 10.87% O b.9.9% O c. $9.9 d. $10.87 e. None of the above 17. If the company has a 60% debt ratio, its Expected EPS is * a. 10.87% b. $9.9 O c. $10.87 O d. 9.9% e. None of the above 18. If D/A ratio is 60%, the standard deviation of the company's ROE would be * a. 1.033 b. 0.413 C. 0.565 d. 0.489 O e. 10.4 19. If D/A ratio is 0%, the standard deviation of the company's EPS is * O a. 9.184 b. 10.654 C.7.245 d. 10.87 e. None of the above