Question

Repeat parts (a) and (b) in Problem 1 assuming Beckett has a tax rate of 35 percent.
In problem
a. Calculate earnings per share, EPS, under each of the three economic scenarios before any debt is issued. Also, calculate the percentage changes in EPS when the economy expands or enters a recession.
b. Repeat part (a) assuming that Beckett goes through with recapitalization. What do you observe?


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  • CreatedOctober 01, 2015
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