Capital Structure and Leverage Query: ABC Corporation has no debt


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Apr 05, 2016. Capital Structure and Leverage Query: ABC Corporation has no debt outstanding and a total the true market value of dollar 80, 000. EBIT are projected to be money 10, 000 if economical conditions are normal. In the event there is a strong expansion in economy, then EBIT will 20% higher otherwise 30% lower. FONEM Corp. is considering bucks 40, 000 debt concern with 5% rate of interest. The proceeds will be used to repurchase the stock. You will find currently 4, 500 shares outstanding. Ignore fees in this problem. Calculate the earnings per share under each condition before and after debt issue. Hendrix007
posted a question ยท Apr 05, 2016 at 10:43am

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