eBook

Problem 9-05

You are given the following estimated per share data related to the S&P Industrials Index for the year 2018:

Sales	$1,950.00
Depreciation	83.00
Interest expense	64.00

You are also informed that the estimated operating profit (EBIT) margin is 12 percent and the tax rate is 32 percent. Do not round intermediate calculations. Round your answers to the nearest cent.

1. Compute the estimated EPS for 2018.

   $

2. Assume that a member of the research committee for your firm feels that it is important to consider a range of operating profit margin (OPM) estimates. Therefore, you are asked to derive both optimistic and pessimistic EPS estimates using 11 and 13 percent for the OPM and holding everything else constant.

   Optimistic EPS: $

   Pessimistic EPS: $