Requirement 1: compute TSL's earnings per share, Start with income from continuing operations. (Round the EPS to the nearest cent and use a minus sign or parentheses for a negative EPS.)

Requirement 2. Analysts believe TSL can earn its current level of income for the indefinite future. Estimate the market price of a share of TSL common stock at investment capitalization rates of 6% , 8%, and 10%. Which estimate presumes an investment in TSL is the most risky? How can you tell?

Turnover Specialists, Ltd. (TSL), specializes in taking underperforming companies to a higher lavel of performance. TSL's capital structure at Decomber 31, 2015, included 11,000 shares of $2.30 preferred stock and 125,000 shares of common stook. During 2016. TSL iasued common stock and ended the year with 135,000 shares o con on stock outstanding. Average common shares outstan ing during 2016 were 131.000 ncomfrom continuing oper tona dunng 2016 was $220 000. The company discontinued a segment of the busness at a gain a $57,000. All amounts aro after income tax. Assume the number of prefarred shares outstanding did not change in 2016. oanding 20 1. Compute TSL's earnings per share. Start with income from continuing operations. 2. Analysts bel eve TSL can eam s cument evel o inco e or he indefi te re. Estrna e e market pnce o a shareof TSL common stock at m est ment capitalization ates o 6%, 8%, and 10%. which es mate presumes an nvestment TSLIS the most risky How can you Requirement 1. Compute TSL's earnings per share. Start with income from continuing operations. (Round the EPS to the nearest cent and use a minus sign or parentheses for a negative EPS. Eamings per Earnings per share: ture Es mate e mari et price o a share o T L common stock at i vestment capitalization tes o 6 0% es men in T LIS the most equirement 2 Analysts believe T How can you tell? L can earn its current level o come or the indefinite and ch estime e presumes en s Begin by selecting the formula needed to estimate the market price of a share of the company's common stock using investment capitalizaton rates. (Abbreviations used: WA Weighted-average.) Estimated value per share Use the formula you determined above to caloulate the estimated value of a share of the company's common stock at the various investment capitalization rates (Round your answers to the nearest cent) Investment Capitalization Rates 6%8%10% ihich estimate prosumes an investment in Turnover Specialists stock is the most risky? How can you tel? The rate of presumes the in est ent is the most sky. You can tell, bacause at tis rate the investor is wiling to pay the for the company's stock