Question
Trying to find out the Common stock Financng, Debt Financing and stock on EPS/EBIT Analysis Common Stock Financing Debt Financing Stock Recession Normal Boom Recession
Trying to find out the Common stock Financng, Debt Financing and stock on EPS/EBIT Analysis
| Common Stock Financing | Debt Financing | Stock | ||||||
| Recession | Normal | Boom | Recession | Normal | Boom | Recession | Normal | Boom |
EBIT | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
EBT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Taxes | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
EAT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
# Shares | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
EPS | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
Here are some entries you may want to consider:
EBIT Normal: $3,589 million (Assumption: from February 1, 2015 Income Statement)
EBIT Recession: $3,100 million (Assumption: earnings lower during recession)
EBIT Boom: $4,200 million (Assumption: earnings higher during boom)
Interest rate: 3.5% (Prime interest rate)
Tax rate: 38% (Assumption: Tax / EBIT both figures from February 1, 2015 Income Statement)
Percent Equity Used to Finance: 70% (Assumption: Beginning point of analysis; Any combination of equity/debt financing can be used)
Percent Debt Used to Finance: 30% (Assumption: Beginning point of analysis
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