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Perform EPS/EBIT analysis to evaluate the attractiveness of debt versus stock as a source of capital to implement strategies. Assumptions Amount Needed to Raise 5,000
Perform EPS/EBIT analysis to evaluate the attractiveness of debt versus stock as a source of capital to implement strategies. Assumptions Amount Needed to Raise 5,000 million CHF Interest Rate 4% Tax Rate 25% Shares Outstanding 3,200 Million Share Price 70.65 CHF EBIT is projected as 10000 CHF, 15000 CHF, 20,000 CHF in recession, Normal and Boom situation. All values are in CHF (not US Dollars) You need to take into account following variations and discuss which one is the appropriate way for this organization. 1 100% debt financing 2 100% stock financing 3 50-50 debt-stock financing 4 30-70% debt-stock financing 5 70-30% debt-stock financing
Perform EPS/EBIT analysis to evaluate the attractiveness of debt versus stock as a source of capital to implement strategies.
Assumptions
Amount Needed to Raise 5,000 million CHF
Interest Rate 4%
Tax Rate 25%
Shares Outstanding 3,200 Million
Share Price 70.65 CHF
EBIT is projected as 10000 CHF, 15000 CHF, 20,000 CHF in recession, Normal and Boom situation.
All values are in CHF (not US Dollars)
You need to take into account following variations and discuss which one is the appropriate way for this organization.
1 100% debt financing
2 100% stock financing
3 50-50 debt-stock financing
4 30-70% debt-stock financing
5 70-30% debt-stock financing
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Investment Analysis and Portfolio Management
Authors: Frank K. Reilly, Keith C. Brown
10th Edition
978-0538482387
