Question
Ski and Board are two identical firms of identical size operating in identical markets. Ski is unlevered with assets valued at $12000 and has 600
Ski and Board are two identical firms of identical size operating in identical markets. Ski is unlevered with assets valued at $12000 and has 600 shares of stock outstanding. Board also has $12000 in assets and has $2000 in debt financed at an interest rate of 6.00% and has 500 shares of stock outstanding. Both Ski and Board pay tax at the rate of 30%.
Calculate the level of EBIT that would make earnings per share the same for Ski and Board. $________________
Place your answer to the nearest dollar. If applicable, your answer should NOT include a comma
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Financial Markets and Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
8th edition
013342362X, 978-0133423624
