Repeat (a) and (b) in problem 16.1 assuming Money has a tax rate of 35 percent. In
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In Problem 16.1
a. Calculate 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 (a) assuming that Money goes through with recapitalization. What do you observe?
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Related Book For
Corporate Finance
ISBN: 978-0071339575
7th Canadian Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Gordon Ro
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