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Choose the correct answer from the following options and enter it into the answering space: A company is an unlevered firm with a total market
Choose the correct answer from the following options and enter it into the answering space: A company is an unlevered firm with a total market value of $3,000,000 with 100,000 shares of stock outstanding. The firm has expected EBIT of $300,000 if the economy is normal and $360,000 if the economy booms. The firm is considering a $1,200,000 bond issue with an attached interest rate of 6 percent. The bond proceeds will be used to repurchase shares. Ignore taxes. What will the earnings per share be after the repurchase if the economy booms? A. $4.00 B. $4.20 C. $4.40 D. $4.60 E. $4.80 F. $5.00 G. $5.20
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