Question
Sams is an all-equity firm with a total market value of $715,000, with 46,000 shares of stock outstanding. Management is considering issuing $158,000 of debt
Sams is an all-equity firm with a total market value of $715,000, with 46,000 shares of stock outstanding. Management is considering issuing $158,000 of debt at an interest rate of 8 percent and using the proceeds to repurchase shares. If EBIT is $63,200, what will be the EPS when the debt is issued? Ignore taxes.
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Modern Financial Markets Prices, Yields, And Risk Analysis
Authors: Mark Griffiths, Drew Winters, David W Blackwell
1st Edition
0470000104, 9780470000106
