Question
The projected EBIT of a firm is $450,000. The firm currently has 100,000 shares of common stock outstanding at a value of $16 per share.
The projected EBIT of a firm is $450,000. The firm currently has 100,000 shares of common stock outstanding at a value of $16 per share. The firm has no debt. By how much will the ROE change if the firm borrows $600,000 at 14% interest and uses the funds to repurchase shares of stock at the market price? Ignore taxes.
A) 6.78% B) 8.48% C) 10.87% D) 11.29% E) 12.08%
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The Exit Strategy Handbook A Complete Guide To Preparing Your Business For Sale
Authors: Jacob Orosz
1st Edition
B0BMSKP4DH, 979-8987344651
