In the previous problem, compute the stock price for Cain Auto Supplies if it sells at 12
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In the previous problem, compute the stock price for Cain Auto Supplies if it sells at 12 times EPS and EBIT is $40,000.
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Cain Auto Supplies and Able Auto Parts are competitors in the aftermarket for auto supplies. The separate capital structures for Cain and Able are presented below.
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Cain Able $ 50,000 Debt @ 10% 100,000 Common stock, $10 par $150,000 Debt @ 10% $100,000 Common stock, $10 par 50,000 Total Total $150,000 Common shares 10,000 Common shares 5,000
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12 times EPS is a description of a ratio that is commonly known as the priceearnings ratio which is ...View the full answer
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Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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