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SLC operates in a market where there are no information asymmetries, no taxes and no transaction costs. The table overleaf partially describes its current financial

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SLC operates in a market where there are no information asymmetries, no taxes and no transaction costs. The table overleaf partially describes its current financial situation and the situation it will face if it goes ahead with the share repurchase. Fill in the blanks in the table, showing your calculations, assuming an interest rate of 5% Current situation Proposed situation Assets 30,000 Debt 0 6,000 1 Equity 30,000 24,000 5% 5% Interest rate 6 Share price Number of shares 5,000 4,000 outstanding Return on assets EBIT 4,000 Interest charged Earnings after interest Return on equity

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