Question
Forecast $1.00 EPS for year 1. Forecast $100 million of EBIT. At the end of year 0, it borrows $200 million in new debt
Forecast $1.00 EPS for year 1. Forecast $100 million of EBIT. At the end of year 0, it borrows $200 million in new debt at 7% interest. It presently has no debt. It intends to repurchase 10 million shares at $20 per share. The tax rate is 30% >70 million shares outstanding. The stock trades at $20 per share after the announcement of the repurchase. Assume no change in the company's P/E ratio. What is your forecast of Trieste EPS after the repurchase? > Use a table for your answer.
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Contemporary Financial Management
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
10th Edition
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