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can someone help me with this practice problem Question Help Quisco Systems has 6 2 bilion shares outstanding and a share price of $17.06 Qusco
can someone help me with this practice problem
Question Help Quisco Systems has 6 2 bilion shares outstanding and a share price of $17.06 Qusco is considering developing a new networking product in house at a cost of $539 milton Alternatively, Quisco can acquire at that already has the technology for 5064 million worth at the current price of Cusco stock Suppose that absent the expense of the new technology. Quisco will have EPS of $0.92 a. Suppose Qusco develops the product in house What impact would the development cost have on Quisco's EPS? Assume all costs are incurred this year and are treated as an R&D expense, Quisco's tax rates 35%, and the number of shares outstanding sunchanged b. Suppose Quisco does not develop the product in house but instead acquires the technology What effect would the acquisition have on Quisco's EPs this year? Note that acquisition expenses do not appear directly on the income statement Assume the firm was acquired at the start of the year and has no revenues of expenses of its own so that the only effect on EPS is due to the change in the number of shares outstanding c. Which method of acquiring the technology has a smaller pact on caring this method cheaper? Explain a. Suppose Oursco develops the product in house What impact would the development cost have on Qasco's EPS? Assume all costs are incurred this year and are treated as an R&D expense, Qusco's tax rate is 35%, and the number of shares outstanding is unchanged Quisico's new EPS would be $(Round to the nearest cont) Incorres Step by Step Solution
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