The capital structure for Cain Supplies is presented next. Compute the stock price for Cain if it

Question:

The for Cain Supplies is presented next. Compute the stock price for Cain if it sells at 19 times earnings per share and EBIT is $50,000. The tax rate is 20 percent.
Cain
Debt @ 9% ......... $100,000
Common stock, $10 par ..... 200,000
Total ........... $300,000
Common shares ........ 20,000

Capital Structure
Capital structure refers to a company’s outstanding debt and equity. The capital structure is the particular combination of debt and equity used by a finance its overall operations and growth. Capital structure maximizes the market value of a...