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EPS and Debt - to - Equity Your corporation is currently all - equity financed with 3 0 0 , 0 0 0 shares of
EPS and DebttoEquity Your corporation is currently allequity financed with shares of common stock selling for $ a share. Currently your firm generates $ in EBIT annually and has a dividend payout ratio. Your firm's tax rate is
a What is your firm's current earnings per share and dividend per share?
b Your firm is considering financing an expansion with a bond issue of $ that will pay annually in interest. If the expansion increases your firm's EBIT to $ what will be your firm's new debttoequity ratio, EPS, and dividend per share?
c If the expansion is instead financed with an issue of new stock, what will be vour firm's new EPS and dividend per share?
If the expansion is financed with a bond issue of $ at annual interest rate, calculate the firm's new EPS and DPS below: Round to the nearest dollar except for the EPS and DPS which should be rounded to the nearest cent.
tableEBIT$
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