Question
Date Wireless has the following assets: Current assets: Temporary $1,190,000 Current assets: Permanent $1,380,000 Capital assets $7,950,000 Total assets $10,520,000 Its operating profit (EBIT) is
Date Wireless has the following assets:
Current assets: Temporary $1,190,000 Current assets: Permanent $1,380,000 Capital assets $7,950,000 Total assets $10,520,000
Its operating profit (EBIT) is expected to be $2.9 million. Its tax rate is 30 percent. Shares are valued at $20. Capital structure is either short-term financing at 5 percent or equity. There is no long-term debt. (Round the final answers to 2 decimal places.)
a. Calculate expected earnings per share if the firm is perfectly hedged.
Answer 1Choose...$5.21$4.26$4.14$4.02$5.58 b. Calculate expected earnings per share if it has a capital structure which is financing by 30% short term debt. 70% is financing with equity.
Answer 2Choose...$5.21$4.26$4.14$4.02$5.58 c. Calculate expected earnings per share if the firm is perfectly hedged and short term rates increase to 12%.
Answer 3Choose...$5.21$4.26$4.14$4.02$5.58
Date Wireless has the following assets:
| Current assets: Temporary | $1,190,000 | |
| Current assets: Permanent | $1,380,000 | |
| Capital assets | $7,950,000 | |
| Total assets | $10,520,000 | |
| | ||
Its operating profit (EBIT) is expected to be $2.9 million. Its tax rate is 30 percent. Shares are valued at $20. Capital structure is either short-term financing at 5 percent or equity. There is no long-term debt. (Round the final answers to 2 decimal places.)
a. Calculate expected earnings per share if the firm is perfectly hedged. | Answer 1Choose...$5.21$4.26$4.14$4.02$5.58 |
b. Calculate expected earnings per share if it has a capital structure which is financing by 30% short term debt. 70% is financing with equity. | Answer 2Choose...$5.21$4.26$4.14$4.02$5.58 |
c. Calculate expected earnings per share if the firm is perfectly hedged and short term rates increase to 12%. | Answer 3Choose...$5.21$4.26$4.14$4.02$5.58 |
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Shape Up Your Finances The Personal Finances Handbook
Authors: Ian Birt
1st Edition
0734608268, 978-0734608260
