Question
Please find the specific questions to which responses are required. 15- Shareholders Equity and 17 Earnings Per Share (30 Marks) The company intends to raise
Please find the specific questions to which responses are required. 15- Shareholders Equity and 17 Earnings Per Share (30 Marks)
The company intends to raise additional capital to finance an expansion. The expected cost is $20M Canadian dollars. The board is uncertain whether it should issue additional shares or new debt, given the current capital structure. The current lending rate is 10% (assumed). Advise the board on the impact of the two financing options on the companys current capital structure. In your analysis, show calculations and analysis of the following:
1-The revised number of outstanding shares and the impact this share issue may have on the existing shareholders;
2-. The impact of the additional share issuance on the earnings per share;
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