In the previous problem, compute the stock price for Cain Auto Supplies if it sells at 12
Question:
In the previous problem, compute the stock price for Cain Auto Supplies if it sells at 12 times EPS and EBIT is $40,000.
Previous problem
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.
Transcribed Image Text:
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
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 76% (17 reviews)
12 times EPS is a description of a ratio that is commonly known as the priceearnings ratio which is ...View the full answer
Answered By
John Njuguna
I am passionate about tutoring and assisting students improve their grades as well as turning them into experts. My work is always well presented, step by step break down making it sure that it is easy to follow and understand. I have a more than 3 years of on line tutoring experience and have assisted thousands of students worldwide.
0.00
0 Reviews
10+ Question Solved
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
Question Posted:
Students also viewed these Business questions
-
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. a. Compute earnings per share if...
-
In Problem 16, compute the stock price for Cain if it sells at 18 times earnings per share and EBIT is $40,000.
-
The capital structure 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%...
-
XYZ Co. It is currently trading at $5 per share and has announced a $0.50 per share dividend payable next year. Using historical information, one analyst estimates XYZ Co.'s dividend growth rate is...
-
The molecule leaves a cell with probability 0.1. When it does so, it enters each of the other cells with equal probability. Are the positions independent over time? Suppose a molecule is transferred...
-
Chalice Ltd sells equipment to Chris Ltd on 1 Jul 2023. Chris Ltd qualifies for a 2-year interest free period. The current cash sales price is $40,000 and Chris Ltd will pay $40,000 on 30 June 2025....
-
Consider a $2^{2}$ factorial experiment with factors A and B. Show that $I N T(A, B)=I N T(B, A)$. That is, the interaction is symmetric in $\mathrm{B}$ and A.
-
Financial statements for Allendale Company follow: ALLENDALE COMPANY Balance Sheets As of December 31 2019 2018 Assets Current assets Cash $ 40,000 $ 36,000 Marketable securities 20,000 6,000...
-
Consider the following sets. A {1,2,3,4), B (2,3,5), and C = {x|0 < - <6 and x is an integer }. (1 point each) 1. Write the union of sets A and C by enumeration. 2. Is A a subset of C? If so, is it...
-
An electric stove with four burners and an oven is used in preparing a meal as follows. Burner 1: 20 minutes ...............Burner 2: 40 minutes Burner 3: 15 minutes ...............Burner 4: 45...
-
The Harding Company manufactures skates. The company's income statement for 2014 is as follows: HARDING COMPANY Income Statement Year ended December 31, 2014 Sales ( 10,000 skates at $50)...
-
Dickinson Company has $12 million in assets. Currently, half of these assets are financed with long-term debt at 10 percent, and half are financed with common stock. Ms. Smith, vice-president of...
-
Debate the differences between an alert-based decision-support management-accountability budgeting, monitoring, and reporting system and a standard reporting system that does not provide instant...
-
(a) Show that the variancecovariance matrix of the disturbances in (9.1) is given by (9.2). (b) Show that the two nonzero block matrices in (9.2) can be written as in (9.3). (c) Show that...
-
A tower packed with 25 m m 25 m m ceramic Raschig rings is to be used for absorbing benzene vapor from a dilute mixture with an inert gas using a wash oil at 300 K 300 K . The viscosity of the oil...
-
Under the assumption that KMSs market share will increase by 0.25% per year (and the investment and financing will be adjusted as described in Problem 13), you project the following depreciation:...
-
A vessel 2.0 m 2.0 m in diameter and 2.0 m 2.0 m deep (measured from the gas sparger at the bottom to liquid overflow at the top) is to be used for stripping chlorine from water by sparging with...
-
Holthausen Corporation issued \(\$ 300,000\) of \(11 \%\), 20-year bonds at 106 on January 1, 2009. Interest is payable semiannually on June 30 and December 31. Through January 1, 2014, Holthausen...
-
A tourist takes a picture of a mountain 14 km away using a camera that has a lens with a focal length of 50 mm. She then takes a second picture when she is only 5.0 km away. What is the ratio of the...
-
Chloroplasts are illuminated until the levels of the Calvin cycle intermediates reach a steady state. The light is then turned off. How does the level of RuBP vary after this point?
-
The Diagonal Stamp Company, which sells used postage stamps to collectors, advertises that its average price has increased from $1 to $5 in the last 5 years. Thus, management states, investors who...
-
You spend $1000 and in return receive two payments of $1094.60-- one at the end of 3 years and the other at the end of 6 years. Calculate the resulting rate of return.
-
A mine is for sale for $240,000. It is believed the mine will produce a profit of $65,000 the first year, but the profit will decline $5000 a year after that, eventually reaching zero, whereupon the...
-
how to connect to oracle database from cpp file step by step? I use Visual Studio and Oracle Instant Client. ? Explain your answer
-
How to determine the storage configuration for a database server for 1000+ staff? The server runs Linux and will have an Oracle database server. The estimated databases currently consume about 8 TB...
-
1. Explain on the financial statement analysis. 2. Explain on EIGHT (8) financial ratio. 3. Describe FIVE (5) types of financial objectives.
Study smarter with the SolutionInn App