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Can someone please help me with this? 4 Reliable Gearing currently is all-equity-financed. It has 18.000 shares of equity outstanding. selling at $100 a share.
Can someone please help me with this?
4 Reliable Gearing currently is all-equity-financed. It has 18.000 shares of equity outstanding. selling at $100 a share. The firm is considering a capital restructuring. The low-debt plan calls for a debt Issue of $280,000 with the proceeds used to buy back stock The high-debt plan would exchange $480,000 of debt for equity. The debt will pay an interest rate of 12%. The firm pays no taxes. a. What will be the debt-to-equity ratio if it borrows $280,000? (Round your answer to 2 decimal places.) ints Answer is complete but not entirely correct. 8.42 3 b. If earnings before Interest and tax (EBIT) are $190,000, what will be earnings per share (EPS) If Reliable borrows $280,000? (Round your answer to 2 decimal places.) Answer is complete and correct. 0.29 EPS c. What will EPS be if it borrows $480,000? (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. $1185 EPSStep by Step Solution
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