Question
A firm has a current capital structure consisting of $400,000 of 6 percent annual interest debt and 50,000 shares of common stock. The firm's tax
A firm has a current capital structure consisting of $400,000 of 6 percent annual interest debt and 50,000 shares of common stock. The firm's tax rate is 21 percent on ordinary income. If the EBIT is expected to be $200,000, the firm's earnings per share will be
a.$3.52
b.$0.74
c.$3.12
d.$2.78
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Survey Of Economics, Principles, Applications, And Tools
Authors: Arthur O'Sullivan, Steven M. Sheffrin, Stephen J. Perez
5th Edition
0132556073, 978-0132556071
