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Problem Two Khonaysser Motors needs a total capital of $2,500,000 for its new project. The company's debt ratio is 35% and they are paying interest
Problem Two Khonaysser Motors needs a total capital of $2,500,000 for its new project. The company's debt ratio is 35% and they are paying interest equal to 10%. The number of shares expected to be constant at 100,000 shares during the year 2020. Below you can find expected useful information for the year 2020 for the company Economy Good Normal Weak Probability Units Sold 0.25 4,000 0.40 3,000 0.35 2,700 Price / Unit Fixed Costs Variable cost/ Unit Price /Share Tax Rate $ 1000 $ 1,500,000 $ 350 $ 16.25 40% Use the above information to solve the below questions. 1: Calculate EPS if the economy is Good * $6.075 $2.175 $2.125 $1.005 None of the above 2: Calculate EPS if the economy is Normal * $6.075 $2.175 $2.125 $1.005 None of the above 3: Calculate EPS if the economy is Weak * $6.075 $2.175 $2.125 $1.005 None of the above 4: Calculate ROE if the economy is Good * 40.20% 37.38% 13.38% 6.18% None of the above 5: Calculate ROE if the economy is Normal * 40.20% 37.38% 13.38% 6.18% None of the above 6: Calculate ROE if the economy is Weak * 40.20% 37.38% 13.38% 6.18% None of the above 7: Calculate the expected ROE * 16.86% 37.38% 18.75% 24.24% None of the above 8: Calculate the expected EPS * $3.2035 $2.7405 $2.5258 $1.9062 None of the above 9: Calculate the risk in ROE (OROE) * 11.4976% 2.8456% 1.9544% 12.2488% None of the above 10: Calculate the risk in EPS (GEPS) * $3.5235 $3.9618 $1.9904 $1.7564 None of the above
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