Question
Ornaments, Inc., is an all-equity firm with a total market value of $685,000 and 35,000 shares of stock outstanding. Management believes the earnings before interest
Ornaments, Inc., is an all-equity firm with a total market value of $685,000 and 35,000 shares of stock outstanding. Management believes the earnings before interest and taxes (EBIT) will be $98,500 if the economy is normal. If there is a recession, EBIT will be 10 percent lower, and if there is a boom, EBIT will be 20 percent higher. The tax rate is 40 percent. What is the EPS in a recession?
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Essentials Of Real Estate Finance
Authors: Doris Barrell
15th Edition
1475462077, 978-1475462074
