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please I need solution now Chapter 16 Homework 6 Saved Ghost, Inc., has no debt outstanding and a total market value of $150,000. Earnings before
please I need solution now
Chapter 16 Homework 6 Saved Ghost, Inc., has no debt outstanding and a total market value of $150,000. Earnings before interest and taxes, EBIT, are projected to be $36,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 15 percent higher If there is a recession, then EBIT will be 25 percent lower. The company is considering a $95,000 debt issue with an interest rate of 8 percent. The proceeds will be used to repurchase shares of stock. There are currently 6,000 shares outstanding. Ignore taxes for this problem. a-1. Calculate earnings per share (EPS) under each of the three economic scenarios before any debt is issued. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 3216.) a-2. Calculate the percentage changes in EPS when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round decimal places, e.g., 32.16.) assuming the company goes through with recapitalization. (Do not round 32.16.) intermediate calculations and enter your answers as a percent rounded to 2 b-1. Calculate earnings per share (EPS) under each of the three economic scenarios intermediate calculations and round your answers to 2 decimal places, e.g., b-2. Given the recapitalization, calculate the percentage changes in EPS when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g. 32.16.) a-1. Recession EPS Normal EPS Expansion EPS a-2. | Recession percentage change in EPS Expansion percentage change in EPS b-1. Recession EPS Normal EPS b-2. Expansion EPS Recession percentage change in EPS Expansion percentage change in EPS Prev 1of 8 NextStep by Step Solution
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