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Doug Robinson and Dante ate considering the possibility of opening their own monufocturing focility. They expect first-year soles to be $800,000, and they feel that
Doug Robinson and Dante ate considering the possibility of opening their own monufocturing focility. They expect first-year soles to be $800,000, and they feel that their variable costs will be opproximotely 40% of soles. Their fixed costs in the first year will be $200,000. Doug and Dante are considering two ways of financing the firm: (a) 40% equity financing and 60% debt at 10%, or (b) 100% equity financing. They can sell common stock to their relatives for $10 per share. Either way, they will need to raise $1,000,000. The tar net in 400 . Whot is the nec income for the lovered option? Whot is the net income of the unleveced option? What is the earnings per share for the levered option? Whot is the earmings per share for the unsevered options? Whot is the DOL fal the compary to two decimet places? What is the orl for the levered option to two decimat plocen? What is the ocl for the ievered option fo two decirtoc ploces? What is the oct for the unlevered oution to the cecimol piocte
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