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please Help ASAP You work for the CEO of a new company that plans to manufacture and sell a new type of laptop computer. The
please Help ASAP
You work for the CEO of a new company that plans to manufacture and sell a new type of laptop computer. The issue now is how to finance the company, with only equity or with a mix of debt and equity. Expected operating income is $620,000. Other data for the firm are shown below. How much higher or lower will the firm's expected EPS be if it uses some debt rather than only equity, i.e., what is EPSL - EPSU? Oper income (EBIT) Required investment % Debt S of Debt S of Common equity Shares issued, $10/share Interest rate Tax rate 0% Debt, U $620,000 $2,500,000 0.0% $0.00 $2,500,000 250,000 NA 25% 60% Debt, L $620,000 $2,500,000 60.0% $1,500,000 $1,000,000 100,000 10.00% 25% O $1.50 $2.08 O $1.91 O $1.67 O $158 Step by Step Solution
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