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Nielson Motors is currently an all equity financed firm.It expects to generate EBIT of $20 million over the next year.Currently Nielson has 8 million shares
Nielson Motors is currently an all equity financed firm.It expects to generate EBIT of $20 million over the next year.Currently Nielson has 8 million shares outstanding and its stock is trading at $20.00 per share.Nielson is considering changing its capital structure by borrowing $50 million at an interest rate of 8% and using the proceeds to repurchase shares.Assume perfect capital markets and there is no tax.
Nielson's EPS if they change their capital structure is closest to:
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