Question
XYZ, Inc., is an all-equity firm with a total market value of $729,000 and 47,300 shares of stock outstanding. Management believes the earnings before interest
XYZ, Inc., is an all-equity firm with a total market value of $729,000 and 47,300 shares of stock outstanding. Management believes the earnings before interest and taxes (EBIT) will be $95,400 if the economy is normal. If there is a recession, EBIT will be 30 percent lower, and if there is a boom, EBIT will be 40 percent higher. The tax rate is 35 percent. What is the EPS in a boom?
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Fundamentals Of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
16th Edition
0357517571, 978-0357517574
