Question
Ornaments, Inc., is an all-equity firm with a total market value of $564,000 and 22,900 shares of stock outstanding. Management believes the earnings before interest
Ornaments, Inc., is an all-equity firm with a total market value of $564,000 and 22,900 shares of stock outstanding. Management believes the earnings before interest and taxes (EBIT) will be $79,800 if the economy is normal. If there is a recession, EBIT will be 30 percent lower, and if there is a boom, EBIT will be 40 percent higher. The tax rate is 34 percent. What is the EPS in a recession?
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Bond Markets Analysis And Strategies
Authors: Frank J. Fabozzi, Francesco A. Fabozzi
10th Edition
026204627X, 978-0253337535
