Question
XYZ Satellites Inc. is an all equity firm with 200,000 shares outstanding and $20 million in earnings after taxes with a market value of $350
XYZ Satellites Inc. is an all equity firm with 200,000 shares outstanding and $20 million in earnings after taxes with a market value of $350 million.The company borrows $75 million to repurchase#50000 shares @8%.The tax rate is 50%. 1) What effect will this have on the earning per share of the firm? 2) At what interest rate would have to be on the debt for the EPS effect to disappear?
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The Complete FinOps Handbook Essential Tools And Techniques For Financial Operations
Authors: Peter Bates
1st Edition
1922435546, 978-1922435545
