Question
Simone's Sweets is an all-equity firm that has 11,500 shares of stock outstanding at a market price of $21 per share. The firm's management has
Simone's Sweets is an all-equity firm that has 11,500 shares of stock outstanding at a market price of $21 per share. The firm's management has decided to issue $120,000 worth of debt at an interest rate of 6 percent. The funds will be used to repurchase shares of the outstanding stock. What are the earnings per share at the break-even EBIT?
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$2.71
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$1.26
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$2.50
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$1.51
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$2.54
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Analysis for Financial Management
Authors: Robert C. Higgins
12th edition
1259918963, 9781260140729 , 978-1259918964
