Question
Ski and Board are two identical firms of identical size operating in identical markets. Ski is unlevered with assets valued at $ 9000 and has
Ski and Board are two identical firms of identical size operating in identical markets. Ski is unlevered with assets valued at $9000 and has 450 shares of stock outstanding. Board also has $9000 in assets and has $4000 in debt financed at an interest rate of 6.00% and has 250 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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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
