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GoozEllenJefferson (GEH) is a levered firm with assets valued at $800,000, has $200,000 of debt issued at 5.5% interest, and 10,000 shares of stock outstanding.
GoozEllenJefferson (GEH) is a levered firm with assets valued at $800,000, has $200,000 of debt issued at 5.5% interest, and 10,000 shares of stock outstanding. Earnings before interest and tax (EBIT) is $25,000 and corporate profit is subject to a tax rate of 25%. Which of the following comes closest to the EPS of GEH?
$0.75
$1.88
$1.00
$1.05
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