Top Up is a levered firm with assets valued at $300,000, has $25,000 of debt issued at 7% interest, and 2,000 shares of stock outstanding.
Top Up is a levered firm with assets valued at $300,000, has $25,000 of debt issued at 7% interest, and 2,000 shares of stock outstanding. Suppose that corporate profits are subject to a tax rate of 25%. Which of the following comes closest to the earnings before interest and tax (EBIT) of Top Up if its earnings per share (EPS) is $0.50?
a) $1,226
b) $1,753
c) $1,508
d) $3,083
e) $3,750
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Authors: Lloyd Byars, Leslie Rue
10th Edition
73530557, 978-0071220668, 71220666, 978-0073530550
