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Campbell Nuts, Inc., has $25,000 of debt, with an annual interest expense of 12 percent. The number of shares outstanding is 7,500. The firm continues
Campbell Nuts, Inc., has $25,000 of debt, with an annual interest expense of 12 percent. The number of shares outstanding is 7,500. The firm continues to face the four cash flow scenarios; recession, normal, growth and boom. Given a corporate tax rate of 34 percent, complete the following table:
State | Earnings before interest and taxes | Interest expense | Net income before taxes | Taxes | Net income | Earnings per share |
Recession | $4,000 | ? | ? | ? | ? | ? |
Normal | ? | ? | $5,000 | ? | ? | ? |
Growth | ? | ? | ? | ? | ? | $0.85 |
Boom | ? | ? | ? | $3,740 | ? | ? |
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